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Analysts at Westpac Banking Corporation explained that there were only modest movements in most asset classes overnight and the news flow light.  

Key Quotes:

“US equities nudged higher (S&P500 up 0.2%), US bond yields ranged, the US$ was modestly higher on Powell comments and major currencies round-tripped.”

“The US dollar index made some gains on upbeat Powell comments, though gave up much of them into the end of the session.”

“EUR did the opposite, falling from 1.1660 to 1602 during the London morning and then bouncing back again.”

“USD/JPY fell from 113.10 to 112.70.”

“AUD fell from 0.7380 to 0.7343 before rebounding to 0.7407.”

“NZD similarly traced a 0.6760-0.6740-0.6805 path.”

“AUD/NZD was stuck in a 1.0860-1.0900 range.”

“The GBP was hit by softer than expected core CPI, hitting a 10 month low at 1.3010.”

“US housing starts posted a steep 12.3% decline in June, well below consensus. The fall was relatively broad-based, with weakness reported in both units and single family homes and across most US districts.”

“Housing starts are notoriously volatile and June weakness could be revised away, but if not it could be a warning that less favourable tax treatment for housing and higher mortgage rates are beginning to bite.”

“Ten of twelve US Fed districts reported moderate or modest growth in the Fed’s Beige Book with worker shortages and tariff concerns more prominent issues.”

“Eurozone June CPI was expected to be a rubber stamping of the initial 1.0%y/y for core inflation, however, softer French CPI and some downside rounding of data meant that the core level slipped to +0.9%y/y (headline inflation remained at 2.0%y/y). Although not a game-changer, together with the release of May construction activity, which was also revised lower, the data still suggest a sluggish 2Q.”

“UK June inflation data surprised on the downside, coming in flat on the month, vs estimates of +0.2%m/m. Core inflation was at 1.9%y/y (est. 2.1%y/y), headline 2.4%y/y (est. 2.6%). The ONS cited promotions on clothing and leisure activities as offsets to rises (such as fuel). Although it may reduce current pricing for a hike at the 2 August MPC meeting, the likelihood remains high (around 75%) given recent BoE comments.”