US equities pushed higher again in Monday’s session with soft US manufacturing data (lowering rate expectations from the Fed) counteracting weak Chinese figures during the Asian session. This saw the NASDAQ outperform, breaking through resistance and hitting its highest level since January 2022.

FX Markets

USD was flat on Monday, the US Dollar Index (DXY) trading either side of 100 in a low volatility, tight range session. Highs of 100.18 were seen just before the US cash session opened when US Treasury yields were at their highs, before sharply paring and trading sub 100 throughout the rest of the US. The US Federal Reserve is now in its blackout period ahead of its July 26th meeting, further adding to the low volatility.

EURUSD saw marginal gains, holding on to the 1.12 handle throughout the session. ECB’s Nagel spoke once again stating he expects a 25bp hike in July but is data dependent for September and he does not currently see a risk of over-tightening, helping to bolster EUR somewhat, also outperforming GBP in a choppy session, before finding resistance just below the big 0.86 figure.

AUD and NZD were generally softer vs the USD, failing to benefit from risk on sentiment with  the upside in US stocks. AUD and NZD both falling victim to soft Chinese GDP data released during the Asian session. AUDUSD briefly lost hold of 0.68 when the Dollar peaked but managed to reclaim the level shortly after and have held hold above it since. NZDUSD found support at 0.6300. AUDNZD rallied slightly, moving back to its 2023 mid-point.

Commodities

Oil had an exciting session, initially drifting lower after weak Chinese data only to explode higher early in the European session after Reuters printed a headline about Saudi Arabian production cuts , which was retracted minutes later seeing USOUSD give up all the gains in minutes.

In today’s economic announcements, the RBA minutes from their July meeting will be released at 11:30 AEST, with the market split on the RBA’s next move (Rates markets pricing in a 25% of a hike in August) AUD traders could see some action at this time.