ECB announces the results of its latest strategy review
– New strategy adopts symmetric 2% inflation target over medium-term
– This may also imply a transitory period in which inflation is moderately above target
The decision here has been very much expected and is a move away from their previous inflation targeting of „below but close to 2%“.

10-year Treasury yields down by nearly 7 bps today to 1.25%
A key question that is being posed by the bond market right now is, are we seeing the death of the reflation trade? And why exactly is that the case?

Equities being hammered across the board
S&P 500 futures are now down 1.5% and that is putting pressure on risk trades on the day, with commodity currencies bearing the brunt in the FX space.

Reuters reports, citing sources familiar with the situation
The report says that the BOJ is expected to slash this fiscal year’s growth forecast in its latest projections next week, as another state of emergency for Tokyo threatens to dent consumption and general economic activity.

As announced by Japanese prime minister, Yoshihide Suga
This comes just two weeks before the Olympics but it is expected after a rise in daily infections in the Japanese capital. Tokyo recorded 920 new cases yesterday, the most since 13 May, followed by 896 new cases today.

Remarks by China’s Cabinet via state media
There have been concerns as of late that policy support may be waning in China but officials have rebuffed that narrative in the past week or so, and this adds to that.

Remarks by IMF president, Kristalina Georgieva
The IMF pretty much weighing on central bank policy although their voice has been relatively insignificant for the most part over the past few years, if not always.

Latest data from the Mortgage Bankers Association for the week ending 2 July 2021
– -6.9%
– Market index 627.0 vs 638.8 prior
– Purchase index 252.4 vs 255.2 prior

The Sankei daily newspaper reports on the matter
This comes amid a rise in infections, with Tokyo recording 920 new daily cases today – the highest since 13 May.

Forex news from the European trading session – 6 July 2021
Headlines:
Markets:
– NZD leads, CAD lags on the day
– European equities lower; S&P 500 futures flat