UPCOMING EVENTS:

• Monday: New
  Zealand Services PMI, PBoC MLF, China Industrial Production and Retail
  Sales, Eurozone Industrial Production, BoC Business Outlook Survey, Fed
  Chair Powell.
• Tuesday:
  Eurozone ZEW, Canada CPI, US Retail Sales, US NAHB Housing Market Index.
• Wednesday: New
  Zealand Q2 CPI, UK CPI, US Housing Starts and Building Permits, US
  Industrial Production and Capacity Utilization, Fed’s Waller, Fed Beige
  Book.
• Thursday:
  Australia Labour Market report, UK Labour Market report, ECB Policy
  Decision, US Jobless Claims.
• Friday: Japan
  CPI, UK Retail Sales, Canada Retail Sales.

Monday

The PBoC is expected to keep the MLF rate
unchanged at 2.50%. Reuters reported
that market participants believe the significance of the MLF rate will
gradually diminish as the PBoC tries to improve the effectiveness of its
interest rate corridor. The PBOC introduced a new cash management mechanism last
week and Governor Pan Gongsheng said recently that the seven-day reverse repo
rate „basically fulfils the function“ of the main policy rate.

Tuesday

The Canadian Trimmed Mean CPI Y/Y is
expected at 2.8% vs. 2.9% prior, while the Median CPI Y/Y is seen at 2.7% vs.
2.8% prior. The BoC will likely need benign data to deliver a back-to-back rate
cut in July given that wage growth jumped to 5.6% in the last labour
market report. The market is assigning
a 78% chance of a rate cut in July and with an upside surprise in the data that
might fall to roughly 50%.

The US Retail Sales M/M is expected at
0.0% vs. 0.1% prior, while the Ex-Autos M/M measure is seen at 0.1% vs. -0.1%
prior. Consumer spending has been pretty stable which is something you would
expect given the positive real wage growth and resilient labour market. We’ve
been also seeing some weakness in the UMich
Consumer Sentiment which could suggest that
consumer spending is likely to soften a bit.

Wednesday

The New Zealand Q2 CPI Y/Y is expected at
3.5% vs. 4.0% prior, while the Q/Q measure is seen at 0.6% vs. 0.6% prior. As a
reminder, the RBNZ kept the OCR unchanged at 5.5% in July but softened
the language a bit, which prompted
the market to increase the expectations of rate cuts by the end of the year.
The first rate cut is seen in October.

The UK CPI Y/Y is expected at 2.0% vs.
2.0% prior, while the M/M measure is seen at 0.1% vs. 0.3% prior. The Core CPI
Y/Y is expected at 3.4% vs. 3.5% prior. The market was assigning a 60% chance
of a rate cut in August but that went down to 50% following some hawkish
comments from BoE’s
Pill.

The central bank chief economist said that
it was an open question of whether the time for a rate cut was now or not and
added that more data will come before the next policy decision, but they had to
be realistic about how much any one or two releases could add to their
assessment.

This suggests that there’s not much
willingness to deliver the first cut in August unless the inflation data comes
out extremely good or the jobs data shows an extremely ugly picture.

Thursday

The Australian Labour Market report is
expected to show 20K jobs added in June vs. 39.7K in May and the Unemployment
Rate to remain unchanged at 4.0%. The data shouldn’t change anything in terms
of policy expectations as everyone is waiting for the Australian Q2 CPI report
on July 31st.

The UK Labour Market report is expected to
show 45K jobs added in June vs. -140K in May and the Unemployment Rate to
remain unchanged at 4.4%. The focus will be on wage growth with the Average
Earnings including Bonus expected at 5.7% vs. 5.9% prior and the Average
Earnings ex-Bonus seen at 5.7% vs. 6.0% prior.

The data shouldn’t influence that much the
expectations for the August BoE decision, but softening in wage growth or ugly
jobs figures should increase the expectations for more easing with the market
pricing in 49 bps of cuts by year-end.

The ECB is expected to keep interest rates
unchanged at 3.75%. The central bank speakers said countless times that they
are not going to do anything in July as they want to wait for more data.
Therefore, this is going to be a non-event and the next truly open meeting is
in September. The market is seeing an additional 46 bps of easing by year-end.

The US Jobless Claims
continue to be one of the most important releases to follow every week as it’s
a timelier indicator on the state of the labour market.

Initial Claims remain
pretty much stable around cycle lows and inside the 200K-260K range created
since 2022. Continuing Claims, on the other hand, have been on a sustained rise
recently with the data printing new cycle highs every week (although last week
we saw a pullback).

This shows that layoffs are
not accelerating and remain at low levels while hiring is more subdued. This is
something to keep an eye on. This week Initial Claims are expected at 235K vs.
222K prior, while there’s no consensus for Continuing Claims at the time of writing although the prior reading saw a drop from 1856K to 1852K.

Friday

The Japanese Core CPI Y/Y is expected at 2.7%
vs. 2.5% prior.Inflation
in Japan is basically at target and there are no strong signals that point to a
reacceleration. It’s hard to see a rate hike given that Japan strived to
achieve inflation for decades and it might ruin this accomplishment by
tightening policy.

The data shouldn’t change much for the BoJ
which is expected to trim bond purchases by a “substantial” amount at the upcoming
policy meeting where the market assigns also a 58% probability of a rate
hike.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

This article was written by Greg Michalowski at www.forexlive.com.

Former President Donald Trump was escorted off stage by Secret Service agents at a rally in Butler, PA, after a series of loud noises, possibly gunshots, were heard. Trump was bloodied but reportedly fine. The source of the noises and if anyone else was injured remains unclear. The rally was declared a crime scene and is under investigation.

The WSJ reports that a shooter was killed by Secret Service. You can hear SS saying „shooters down“ in the the video. There was apparently one other bystander killed according to sources.

There appears to be some blood around Trump’s ear and across his face, as he was escorted off the stage. He seems to be ok. You can hear him instructing Secret Service.

Pres. Biden released a statement and will address the nation.

Former Pres. Obama tweeted:

Speaker of the House Mike Johnson said:

Former Speaker of the House Nancy Pelosi tweeted:

Donald Trump Jr’s tweet:

Ivanka Trump’s daughter Ivanka tweeted:

The Republican National Convention is scheduled to start on Monday and concludes with the formal nomination of the former Pres. Trump as the nominee. It will be a interesting as to which way this turns. The US is sitting on the edge.. Personally, hoping that cool heads prevail and people gather themselves and personally call an end to the rhetoric on both sides because it is not – and will never – work. Hate is not the answer. Prayers for peace.

This article was written by Greg Michalowski at www.forexlive.com.

Bitcoin technical analysis in this simple 4h chart

BTCUSD chart and technical analysis – watch these key levels

Bitcoin trading analysis: key points and strategies 🤑📉📈

Bulls‘ strategy: 📈

• Breakout from yellow bull flag:
  • Target Point 1: Around $59,850.
  • Target Point 2: If Point 1 is breached, aim for approximately $62,000 (anchored VWAP from 22 Jan 2024).
• Bullish scenario:
  • Watch for a breakout without a pullback at Point 1.
  • Successful breakout leads to next resistance at $62,000.

Bears‘ strategy: 📉

• First lower standard deviation test:
  • Bears aim for a test around $53,750 (first lower standard deviation of anchored VWAP).
• Psychological $50k level:
  • Significant liquidity below the $50K mark.
  • Key Point: Potential for stops being hit below $50K, triggering more selling pressure.
• Bottom band reversal:
  • Watch for price action around $48,850, where previous long positions were stopped out.
  • Potential reversal point at the bottom band of the yellow channel.

Recommendations for traders: 💡💰

• Shorting opportunity:
  • Consider shorting at Point 2 if the price reaches around $62,000.
• Long position:
  • Look for buying opportunities below the $50K mark, especially around $48,500.

Important note:

• Trade at your own risk!
  • Always manage your risk and consider the market conditions before entering any trades.

Stay updated:

• Visit ForexLive.com for the latest market analysis and updates.

Happy trading! 🚀📊

This article was written by Itai Levitan at www.forexlive.com.

Week Ahead 15th-19th July:

• Mon: Republican Convention, Holiday: Japanese Marine Day, Eurogroup Meeting, Eurogroup Informal meeting ofEnergy Ministers; Chinese GDP (Q2), Industrial Output/Retail Sales (Jun), Swiss PPI (Jun), US NY FedManufacturing (Jul), EZ Industrial Production (Jun); China’s Third Plenum (15-18th July)
• Tue: Republican Convention; German Wholesale Price Index (Jun), ZEW (Jul), EZ Trade Balance (May), US Export/Import Prices (Jun), Retail Sales (Jun), Canadian CPI (Jun), US NAHB (Jun), New Zealand CPI (Q2)
• Wed: Bank of Indonesia Announcement, Republican Convention; UK CPI (Jun), EZ HICP Final (Jun), US Building Permits/Housing Starts (Jun), Industrial Production (Jun)
• Thu: ECB Policy Announcement, SARB Policy Announcement Republican Convention, Meeting of the EuropeanPolitical Community; Japanese Trade Balance (Jun), Australian Employment (Jun), UK Unemployment/Wages(May), US IJC (13th Jul), Philadelphia Fed (Jul),
• Fri: Japanese CPI (Jun), German PPI (Jun), UK Retail Sales (Jun), Canadian Producer Prices (Jun)

Note: Previews are listed in day order

Republican Convention (Mon-Thu):

The 2024 Republican National Convention (RNC) will take place from July 15-18th in Milwaukee, Wisconsin where Donald Trump will officially be crowned the Republican candidate for the 2024 US election. In his acceptance speech on Thursday, Republicans across the party want him to take advantage of President Biden’s struggles by explaining his ideas for a second presidency, as political reporters note he needs to avoid the politics of division. Further to this, whilst it is the Republican Convention and it will attract attention, it will be interesting to see if they can keep out of the news cycle and keep the pressure on Biden. On Trump’s speech, the takeaway for most observers, regardless of all the careful planning and choreography, will be what Trump himself says in his acceptance address. In addition, Trump will nominate his VP, where sources note that it is likely to be on Monday, July 15th, while other sources suggest the running mate will be introduced next Wednesday by Donald Trump Jr. As such, it has raised speculation that Senator JD Vance will be named the VP pick after being endorsed by Don Jr., and it is seen as notable that the eldest son will speak immediately before the running mate delivers remarks. However, sources added caution to this theory as the speaking schedule was decided three to four weeks ago and they were uncertain how instructive Jr’s involvement was. The other names in the hat are seemingly Doug Burgum and Marco Rubio, but they are plenty of others who could spring a surprise. It is worth noting that the convention is in Wisconsin, which is a battleground state and one that Biden won by a narrow margin of 20k votes last time out.

Chinese GDP and Activity data (Mon):

Q2 GDP Y/Y is forecast at 5.1% (prev. 5.3%) and Q/Q at 1.1% (prev. 1.6%), while June Retail Sales are forecast at 3.3% (prev. 3.7%), Industrial Output at 5.0% (prev. 5.6%), and Urban Investments at 3.9% (prev. 5.0%). The data comes as the Third Plenum of the CCP’s 20th National Congress kicks off, which is expected to focus on addressing the housing crisis, boosting technology self-sufficiency, and relieving local fiscal strain – this will likely grab attention amid the chance of stimulus announcements. Industrial Production and Retail Sales growth are both expected to have cooled in June, with property investment plunging and urban unemployment holding steady at 5%. The outlook for the second half of the year is also dim, with GDP growth projected to decelerate to 4.2% unless significant stimulus measures are introduced, according to Nomura. Meanwhile, one major risk is the US election in which former President Trump is looking highly likely to regain the White House position, in turn risking inflaming trade tensions with China.

PBoC MLF (Mon):

The PBoC is expected to maintain the medium-term lending facility (MLF) rate at 2.50% and reduce some liquidity in the banking system during its upcoming operation on Monday, according to a Reuters survey. In a poll of 35 market participants, 97% anticipate no change in the 1-year MLF rate, with only one predicting a slight reduction. The PBoC’s recent introduction of a new cash management mechanism and comments from Governor Pan Gongsheng suggest a shift in focus towards using the seven-day reverse repo rate as the primary policy tool, diminishing the MLF rate’s significance. Since the last Loan Prime Rate (LPR) setting on 20th June, it was reported that the PBoC will make clear it will start to use a short-term interest rate as its main policy rate after reducing the importance of the MLF rate as a policy benchmark, according to PBoC-backed Financial News citing unnamed industry people. Back to the poll, 80% of respondents expect only a partial rollover of the CNY 103bln MLF loans due this month, as loosening cash conditions reduce demand for these loans. For reference, the next LPR fixing is slated for July 22nd.

China’s Third Plenum (Mon-Thu):

The upcoming Third Plenum of the Chinese Communist Party’s (CCP) 20th National Congress, scheduled from July 15-18, 2024, is poised to garner some attention as it has historically introduced major structural reforms. This year, the Plenum is expected to focus on technology innovation, demographic challenges, and social welfare enhancements. Key policy areas likely include promoting technology self-sufficiency, raising retirement ages, encouraging higher birth rates, and improving social welfare systems such as employment, education, and healthcare. Bloomberg Economics highlights potential measures to address the housing crisis, including a „big-bang solution“ although analysts deem this as unlikely. More feasible measures would include targeted programs, according to desks. Furthermore, the PBoC may expand its balance sheet to support housing market stabilisation, although desks are cautious as this could lead to higher debt and inflation. Fiscal reforms are also anticipated, focusing on improving fiscal transfers to local governments rather than comprehensive tax overhauls. Long story short, the Third Plenum is expected to set the stage for China’s economic trajectory, balancing immediate economic support with long-term structural reforms, with eyes on any immediate policy implications against the backdrop of soft inflation and import contraction – both indicative of weak domestic demand. Bloomberg suggests that the PBoC could announce a USD 41bln programme to help state-owned firms purchase unsold housing stock. Analysts at ING posit that “The market has been looking ahead to this event for some time and will watch closely for new policy signals and communication”. Elsewhere, the desk at BofA said, “While the market seems to hold some expectations, we do not see a high probability of (1) a major reform on rural land (such as villagers to monetise rural land to purchase home in cities) and (2) an imminent step-up in the scale or funding support for the property destocking program.”

US Retail Sales (Tue):

Headline retail sales are currently expected to come in unchanged in June, down from the prior 0.1% gain, although analyst forecasts are currently quite varied, ranging between -1.8% to +0.3%. The core (ex-autos) is expected at +0.1%, trimming the prior -0.1% outturn, with forecasts between -0.3 to +0.3%. Note, the super core (ex gas and autos) previously rose by 0.1%. There will also be attention on the control metric, which is often used as a gauge of the consumer spending component of GDP. Note, the Atlanta Fed GDP is currently tracking growth at 2.0% for Q2. ING write that “Lower gasoline prices and falling auto sales point to an outright monthly decline in retail sales given this is a dollar value figure. Weaker consumer confidence also suggests downside risks.”

Canadian CPI (Tue):

The June Canadian CPI will likely help determine whether the BoC follows up with a back-to-back rate cut in July after cutting by 25bps in June. Money markets are currently pricing in 18bps of easing at the July meeting, which implies a 72% probability of a rate cut. The prior statement noted that the BoC agreed policy no longer needs to be restrictive and that recent data increased their confidence that inflation will continue to move towards the 2% target. It was still cognizant that inflation risks do remain, however. The Inflation print in May was hotter than expected, but the BoC core measures remained within the upper end of the BoC’s inflation target of 1-3%. However, the June labour market report was very weak, with a rising unemployment rate with the overall employment change declining by 1.4k. If inflation cools in June, it will likely endorse another BoC rate cut, particularly when coupled with a rising unemployment rate. Note, that expectations have not yet been compiled for the upcoming data.

New Zealand CPI (Tue):

The Q2 CPI is seen rising 0.6% Q/Q, matching the prior pace, but forecasts range between 0.4-0.6%. The Y/Y pace is expected to cool to 3.5% from 4.0% previously, with forecasts ranging between 3.3-3.5%. Note, the latest RBNZ forecasts see inflation slowing to 0.6% Q/Q and 3.6% Y/Y. Analysts at Kiwibank note that „Softer monthly price data suggest downside risk to the RBNZ’s forecasts. However, the surprise is likely to come on the imported side“. Kiwibank are a touch more dovish than the consensus, looking for 0.5% and 3.4%, but they do note that domestic inflation is more important for policy, adding that unlike imported inflation, domestic price pressures are proving sticky with services prices elevated. The data will help determine future rate paths of the RBNZ, given the latest Policy Announcement. As a reminder, the RBNZ kept the OCR unchanged at 5.50%, as unanimously expected, while it maintained its rhetoric that the Committee agreed the OCR will need to remain restrictive but it added that the extent of this restraint will be tempered over time consistent with the expected decline in inflation pressures, which was a dovish leaning tilt from the central bank. Note, money markets are currently pricing in 14bps of easing by the August meeting, which implies a 56% probability of a 25bp rate cut. A cool inflation print will likely see this probability increase.

UK CPI (Wed):

Expectations are for headline Y/Y CPI to hold steady at 2.0%, core to remain at 3.5% and services to tick lower to 5.6% from 5.7%. As a reminder, the prior release saw UK CPI return to the BoE’s 2% target for the first time since July 2021 with ING observing that “areas like food, household goods and clothing which are all now contributing considerably less to inflation than just a few months ago”. Elsewhere, the core rate pulled back to 3.5% from 3.9% and services slipped to 5.7% from 5.9%. This time around, analysts at Pantheon Macroeconomics, are of the view that headline inflation will actually slip below the MPC’s 2% target, coming in at 1.9%, whilst also observing that a consensus outturn for services inflation would put it well-above the MPC’s 5.1% projection. The consultancy makes the observation that „strength in labour-intensive CPI components reflects still elevated wage growth and particularly April’s 9.8% minimum wage hike feeding through“. From a policy perspective, odds of an August rate cut receded last week following hawkish comments from BoE’s Haskel, Mann and Pill. On the latter’s comments, it is worth noting that even a soft services CPI outturn may be dismissed by the MPC with the Chief Economist remarking that “we have to be realistic about how much any one or two releases can add to our assessment.“ As it stands, odds of an August cut stand at around 52% (vs. circa 60% earlier in the week) with a total of 48ps of easing seen by year-end.

ECB Announcement (Thu):

Expectations are unanimous amongst economists that the ECB will stand pat on rates with markets assigning a 92% chance of such an outcome. As a reminder, at the prior meeting, the ECB cut rates for the first time since September 2019, with the accompanying statement noting that the „Governing Council is not pre-committing to a particular rate path“. Since the June announcement, headline HICP ticked lower to 2.5% from 2.6%, with ING making the observation that sticky services inflation at 4.1% kept “core inflation too elevated for another imminent rate cut”. From a growth perspective, Q2 GDP will not be available until July 30th, however, more timely PMI metrics from S&P Global saw the EZ-wide manufacturing print fall to 45.8 from 47.3, services nudge lower to 52.8 from 53.2, leaving the composite at 50.9 vs. prev. 52.2. In the labour market, the unemployment rate remains at its historic low of 6.4%. Rhetoric from officials has suggested a move lower in rates this month is unlikely with President Lagarde stating officials are in no hurry to cut rates again after June’s move and the central bank requires additional reassurance that inflation is headed back towards 2% before it cuts rates further. Hawks on the GC have been more explicit in their views with ECB’s Knot stating that there is no reason to cut in July, adding that the next truly open meeting is in September. As such, it looks like the upcoming meeting will largely be a non-event with policymakers set to sit on their hands and see how data plays out between now and September. On which, market pricing currently assigns a roughly 80% chance of a cut with a total of 46bps of easing seen by year-end.

SARB Announcement (Thu):

Likely to once again keep the Repo Rate at 8.25%. In June, the rate was maintained with the statement noting that considerable uncertainty remains around long-term inflation while being more optimistic on the medium-term view, stating that they see CPI stabilising at the 4.5% objective in Q2-2025. The main update since the last SARB announcement has been the final tally of election results and the agreement between ANC and the Democratic Alliance to form a government of national unity. On the data front, May’s CPI printed in-line with the prior and newswire consensus at 5.2% Y/Y, markedly above the 4.5% mid-point of the 3-6% SARB target band. The latest Reuters poll, released in June, has respondents looking for the SARB to remain on hold until November.

Australian Employment (Thu):

Employment change is expected at 20k in June (prev. 39.7k May), with the participation rate seen ticking lower to 66.7% (prev. 66.8%) and the Unemployment Rate steady at 4.0%. For June, analysts at Westpac forecast an employment rise of +30k, aligning with current population growth rates and stabilising the employment-to-population ratio -this ratio is expected to moderate in the second half of the year as employment growth slows. The analysts also anticipate the Participation Rate to remain flat at 66.8%, maintaining the unemployment rate at 4.0%. Westpac suggests the focus will also be on other measures such as underemployment and youth unemployment, which the RBA closely monitors, especially with softening hours worked and emerging industry differences.

UK Unemployment/Wages (Thu):

Expectations are for the ILO unemployment rate to hold steady at 4.4% in the 3M period to May, employment change to expand 45k vs. prev. -140k, headline earnings growth 3M/YY to cool to 5.7% from 5.9% with the ex-bonus metric seen at 5.7% vs. prev. 6.0%. As a reminder, the prior release saw the unemployment rate unexpectedly jump to 4.4% from 4.3%, employment contract 140k and headline wage growth hold steady on a 3M/YY basis at an elevated rate of 5.9%. This time around, economists at Pantheon Macroeconomics expect pay growth to comfortably exceed the MPC’s forecast as the National Living Wage increase from April filters through into the data. More specifically, Pantheon assumes “private-sector AWE excluding bonuses in April is revised up 0.1pp and rises 0.6% month-to-month in May, far exceeding the MPC’s 0.2% forecast”. Elsewhere, the consultancy expected the unemployment rate to hold steady at 4.4%, whilst also observing that “business surveys suggest employment growth has been stable or even increased slightly over the past few months”. From a policy perspective, as has been the case for many months now, the employment data will be downplayed due to reliability issues. However, the wages components will be eyed by the hawks on the MPC with BoE’s Mann recently stating that “wage growth is still far away from being consistent with the inflation target”.

Japanese CPI (Fri):

Core Y/Y is expected to tick higher to 2.7% in June from 2.5% in May, with the headline Y/Y expected to accelerate to 2.9% from 2.8% – driven by higher prices for utilities and manufactured goods. This aligns with previous indicators such as Tokyo inflation and producer prices. The BoJ is concerned about inflation driven by exchange rate pass-through and expects solid wage growth to continue adding to inflationary pressure in the coming months, as per several officials over the recent weeks. Analysts at ING also flag that “the government plans to offer an energy subsidy programme from August to October, which will temporarily weigh on headline inflation.” The data comes ahead of the BoJ’s 31st July confab in which the Central Bank is expected to lower its GDP growth forecast due to a revision of historical GDP data. However, it will likely maintain its growth forecasts for 2025 and 2026, projecting the economy remains on track for moderate recovery. The BoJ’s inflation forecast is expected to stay around its 2% target through early 2027, supporting the case for a potential near-term interest rate hike, according to Reuters.

UK Retail Sales (Fri):

Expectations are for headline Y/Y retail sales to rise 0.2% vs. prev. 1.3% with the M/M rate set to contract 0.4% vs. prev. +2.9%. In terms of recent retail indicators, UK BRC retail sales contracted 0.5% Y/Y with the accompanying report noting “Retail sales performed poorly in June as the cooler weather during the first half of the month dulled consumer spending… Retailers remain hopeful that as the summer social season gets into full swing and the weather improves, sales will follow suit”. Elsewhere, the Barclaycard Consumer Spending observed that “the cold in early June 2024, in contrast to 2023’s sunshine and warm weather resulted in overall Retail spending falling by -2.6% in June 2024, when compared to this time last year”. Adding, “this is the lowest year-on-year growth since June 2022 (-3.8%), as the cold weather continued to deter shoppers from visiting the high-street, resulting in a slowdown in in-store spending (excluding groceries) and clothing sales”.

This article originally appeared on Newsquawk

This article was written by Newsquawk Analysis at www.forexlive.com.