Articles

Australian data – Retail Sales May 2025: +0.2% m/m, short of expectations again

• expected +0.4%, prior -0.1%

more to come

This article was written by Eamonn Sheridan at www.forexlive.com.

The S&P 500 is likely to extend its rally through the next couple of weeks, boosted by improving liquidity, falling volatility, reduced recession fears, and strong seasonal trends, according to flow strategists at Goldman Sachs.

Info via Bloomberg:

“We think this rally will continue for the next couple weeks but lose steam into August”

“We are entering the strongest month for the S&P historically” (July, with the first half of the month better than the back half)

Tailwinds cited:

• seasonality
• lower volatility supporting sentiment
• systematic investors still have significant capital to allocate
• improved liquidity
• sentiment improved with geopolitical tensions easing and optimism growing around trade negotiations and possible rate cuts

GS on risks:

• rally has been narrow
• lower-quality stocks leading
• bullish positioning rising sharply

This article was written by Eamonn Sheridan at www.forexlive.com.

Australian May 2025 building permits +3.2% m/m

• expected +4.8%, prior -5.7%

+6.5% y/y

• prior +7.5%

more to come

This article was written by Eamonn Sheridan at www.forexlive.com.

The US dollar is under pressure as foreign investors show diminishing demand for dollar-denominated assets, according to Deutsche Bank analysts.

Using the bank’s ETF flow data:

• foreigners “are no longer buying enough dollar assets to finance America’s huge current account deficit.”

DB highlights recent data showing the U.S. net international investment position (NIIP) narrowed slightly in the first quarter to -$24.61 trillion, compared to -$26.54 trillion in the fourth quarter. This shift reflects weaker performance in US assets and ongoing dollar depreciation.

To return to historical norms in the ratio between GDP and NIIP, DB estimates that the dollar would need to weaken by 30% to 35% from current levels … which “highlight just how extreme the current U.S. flow problem is.”

This article was written by Eamonn Sheridan at www.forexlive.com.

OPEC+ meets on July 6, the cartel is expected to hike August output by 411,000 bpd.

Russian Deputy Prime Minister Alexander Novak says the decision will be made on the day:

• “We’ll review it during the meeting, as is traditional“

The group has been steadily adding back oil output since April:

• monthly increases of 411,000 bpd
• chipping away at unwinding 2.2 million barrels per day of voluntary cuts

This article was written by Eamonn Sheridan at www.forexlive.com.

Trump: Israel agrees to 60-day Gaza ceasefire proposal – via a post on his social media app.

• says Qataris, Egyptians will deliver final deal
• “Hope Hamas takes this deal”
• Gaza ceasefire deal “will not get better, only worse”
• Productive meetings with Israeli representatives confirmed

Anything that relieves the suffering of the people in Gaza would be great.

This article was written by Eamonn Sheridan at www.forexlive.com.

Iran prepped to mine Strait of Hormuz last month after Israeli strikes, but the mines were never deployed, according to U.S. officials.

Reuters carry the story. In brief:

• A blockade would have disrupted global trade, with the strait carrying around 20% of the world’s oil and gas shipments.

• U.S. hasn’t ruled out the possibility that the mine preparations were a bluff to signal Tehran’s readiness without intent to act.

• Iran has the capability to close the Strait, though it exports oil through it as well; over 5,000 naval mines are in its arsenal.

This article was written by Eamonn Sheridan at www.forexlive.com.

• Flow of funds moves into Dow and small cap stocks. Nasdaq lags
• Trump: Not thinking about extending the July 9 deadline
• Crude oil futures settle at $65.45
• Nikkei: US to handle Japan later in tariff talks after focusing on India
• Republican Norman says he is a “No” on rule and also the Senate tax bill
• Trump: They (US) will fill the SPR when the price is right
• House to vote on the Trump tax bill tomorrow
• WSJ Timiraos: Does not see effort to set stage for a cut in July by Powell/Fed
• Atlanta Fed GDPNow growth estimate for Q2 2.5% versus 2.9% last
• US Senate passes sweeping tax cuts and spending bill
• European indices close mostly lower
• A summary of the comments from Central Bank Heads from the ECB Forum in Sintra Portugal
• US construction spending -0.3% versus -0.2% expected
• ISM manufacturing PMI for June 49.0 versus 48.8 expected
• US May JOLTs job openings 7.769M vs 7.300M expected
• US June final S&P Global manufacturing PMI 52.9 vs 52.0 prelim
• Watch Live: ECB SIntra Central Bank Panel. Powell: Fed will remain patient w/rates
• White House CEA Miran: Optimistic about trade deal with the EU
• The war of words between Trump and Musk heating up
• Gaza negotiations: There is possibility to reach agreement soon
• Trump: Musk is upset he lost the EV mandate but ‘he could lose a lot more than that’
• ECB’s Muller: It makes sense for ECB interest rates to stay on hold for a while
• Forexlive European FX news wrap: Eurozone CPI in line, USD remains under pressure
• SNB’s Zanetti: Negative interest rates are an option

The USD started the US session on its back foot once again. The EURUSD and the GBPUSD both traded at new record highs for 2025 (lower USD). However, JOLTS job openings were solid and above expectations (7.769 million versus 7.300 million estimate). ISM data was okay (49.0 versus 48.8 estimate and 48.5 last month).

Fed Chair Powell speaking at the ECB Forum in Sintra, Portugal did not rule out a July cut, but he was not exactly encouraging about the possibility. He is to be conciliatory toward his nemesis Pres. Trump who continues to criticize the chairman’s reluctance to cut rates.Powell today acknowledged that the:

• U.S. economy is in a good position and that, aside from tariff effects, inflation is at a favorable level.
• He noted that higher inflation readings are expected this summer due to tariffs,
• He suggested the Fed might have already cut rates were it not for that added risk.
• He reaffirmed the Fed’s commitment to a data-dependent, meeting-by-meeting approach and did not rule out a rate cut in July of.
• He emphasized the need to monitor inflation and labor market data closely.
• On fiscal issues, he acknowledged that the U.S. debt path is unsustainable and needs to be addressed.

Oh, and he declined to comment on his future at the Fed but advised his eventual successor to avoid political entanglement.

From the other central bankers:

• ECB President Christine Lagarde stated that the euro area has achieved its 2% inflation target, but emphasized the need to remain vigilant. She reiterated the ECB’s data-dependent stance, noting decisions will be made meeting by meeting, without committing to a particular rate path. On a broader level, she warned that any significant shift in the global role of the U.S. dollar would take considerable time. Lagarde also voiced deep concern about the erosion of truth in the digital era, citing AI and manipulated public opinion as emerging threats to data integrity.

• Bank of England Governor Andrew Bailey said inflation pressures remain, and the possibility of second-round effects is being watched closely. He noted signs of economic and labor market softening and believes the general direction for interest rates is still downward. While it’s too early to assess the full impact of tariffs, he warned of potential pressure on demand and supply chains. Bailey emphasized that policy remains restrictive but expects it to gradually become less so, moving toward neutral. He added that the concept of “restrictiveness” is central to BoE thinking and advised his successor to maintain humility.

• Bank of Japan Governor Kazuo Ueda highlighted that although headline inflation has been above 2% for nearly three years, underlying inflation remains below target. He said any future rate hikes will depend on the overall inflation dynamic, including wage growth and expectations. Ueda noted Japan’s current policy rate is still below the neutral level and steered clear of commenting on trade negotiations.

The central bank commentary and US data, helped to reverse the USD with larger declines either erased or reduced. The USD is ending the day mixed vs the major currencies. Below are the % changes of the USD vs the major currencies:

• EUR -0.11%
• JPY -0.32%
• GBP -0.08%
• CHF, -0.18%
• CAD, +0.26%
• AUD, unchanged
• NZD, unchanged.

US yields moved higher, especially in the shorter end, after starting the US session lower. The 30 year did fall marginally:

• 2-year yield 3.774%, +5.3 basis points
• 5-year yield 3.831%, +3.8 basis points
• 10-year yield 4.241%, +1.6 basis points
• 30-year yield 4.763%, -1.1 basis points

U.S. stocks ended the day mixed, with the Dow Jones Industrial Average and small-cap Russell 2000 posting gains, while the S&P 500 finished near flat and the NASDAQ closed lower. The divergence reflected a rotation of capital out of large-cap tech stocks and into small-cap equities and industrial names, favoring the more cyclical components of the Dow

• Dow +0.91%
• S&P index -0.11%
• NASDAQ index -0.82%
• Russell 2000 +0.94%

IN other markets:

• Crude oil futures remain in a $64 to $66.33 range. It is currently trading up $0.45 at $65.56. That level is $0.30 above the 100-hour moving average at $65.26. Traders are waiting for the next shove.
• Gold prices rose $36.98 were 1.12% to $3340.15.
• Bitcoin fell by $1418 to $105,761.

In popcorn eating news,

• Pres. Trump and Elon Musk exchanged barbs once again, but refrained from going too far. Nevertheless, Trump did say that perhaps Elon needed to be “DOGED” and that it would save the taxpayers lots of money.
• Trump also threatened Japan with tariffs of 30-35% and he did not see a deal being done before July 9th deadline
• He did see the potential for trade deal with India
• The big, beautiful tax bill passed the Senate, but there is some concern that the most conservative Freedom Party members of the house were not pleased with the Senate spending amendments.That may put into jeopardy a July 4th signing by the President (Friday).

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

Via oilprice.com:

—

Expectations I had seen centred on:

• Headline crude -1.8 mn barrels
• Distillates -1.0 mn bbls
• Gasoline -0.2 mn

This data point is from a privately-conducted survey by the American Petroleum Institute (API).

• It’s a survey of oil storage facilities and companies
• The official report is due Wednesday morning US time.

The two reports are quite different.The official government data comes from the US Energy Information Administration (EIA)

• Its based on data from the Department of Energy and other government agencies
• Whereas information on total crude oil storage levels and variations from the previous week’s levels are both provided by the API report, the EIA report also provides statistics on inputs and outputs from refineries, as well as other significant indicators of the status of the oil market, and storage levels for various grades of crude oil, such as light, medium, and heavy.
• the EIA report is held to be more accurate and comprehensive than the survey from the API

This article was written by Eamonn Sheridan at www.forexlive.com.

The market rotated out of the large/mega-cap tech stocks today. Markets got a little spooked by better than expected JOLT job openings and the realization that July is probably not a month for a rate cut.

Some recent gainers were hit hard today.

• Nvidia -2.69%
• Broadcom -3.82%
• SuperMicro Computer -3.14%
• AMD -3.71%
• Meta -2.42%
• Palantir -4.27%
• Palo Alto Networks -3.33%

Meanwhile, the Dow stocks shined with the following 15 Dow stocks rising by 1.25% or more

• UnitedHealth (UNH): +4.38%

• Amgen (AMGN): +4.11%

• Sherwin-Williams (SHW): +3.73%

• Merck & Co (MRK): +3.25%

• Nike (NKE): +3.19%

• Honeywell (HON): +2.53%

• Johnson & Johnson (JNJ): +2.02%

• McDonald’s (MCD): +1.97%

• Home Depot (HD): +1.93%

• Chevron (CVX): +1.61%

• Coca-Cola (KO): +1.38%

• 3M (MMM): +1.34%

• Apple (AAPL): +1.39%

• American Express (AXP): +1.31%

• Procter & Gamble (PG): +1.24%

The final numbers for the major indices are showing:

• Dow industrial average rose 400.29 points or 0.91% at 44495.06
• S&P index -6.90 points or -0.11% at 6198.05
• NASDAQ index -166.84 points or -0.82% had 20202.89
• Russell 2000 rose 20.43 points or 0.94% at 2195.46

The day was clearly rotational which is ok as it implies a growing economy, but there is some selling of the rich and buying the less fortunate/poor.

Two days of record closes in the S&P and Nasdaq come to an end.

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

Retail sales data from Australia is the highlight. The Reserve Bank of Australia meet next week, July 7 and 8, when a 25bp cash rate cut is widely, but not unanimously, expected. Its unlikely the data today will sawy expectations too much, but you never know, rioght?

• This snapshot from the ForexLive economic data calendar, access it here.
• The times in the left-most column are GMT.
• The numbers in the right-most column are the ‘prior’ (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.

This article was written by Eamonn Sheridan at www.forexlive.com.

Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so:

This article was written by Eamonn Sheridan at www.forexlive.com.