The U.S. Dollar is trading in mostly stronger ranges across the board after an eventful weekend.
Overview
For the first time since January, the thirty-year yield for U.S. treasuries rose above the two-year rate as bets have increased that former President Donald Trump will be taking back office in upcoming elections in November. A shooting took place Saturday during a Trump campaign rally that he managed to escape with minor injury while there were a few casualties. As the country wrestles with strong reactions to political violence, there seems to be an effort on both sides of the political spectrum to calm tensions and seek unity.
Markets are pricing in the idea that a Trump administration would result in more domestic spending which would give rise to inflation. If so, this would make it more unlikely that the Federal Reserve would find the room to jump into multiple interest rate cuts. Today, we will get a chance to hear directly from Fed chairman Jerome Powell when he is interviewed by David Rubenstein of the Economic Club of Washington at 12:20 PM. Data tomorrow will feature Retail Sales while we get Housing as well as industrial Production gauges on Wednesday. Expect various commentary from fed officials as they are questioned separately throughout the week.
What to Watch Today…
- Retail Sales on Tuesday
- Industrial Production Wednesday
- ECB Meeting Thursday
- Monex USA Online is always open.
EUR ⇑
The Euro is up to its best level since March 21st as a very busy week brews ahead of the European Central Bank’s decision announcement on Thursday. Plenty of indicators will be released with inflation primarily in the eyes of traders for Wednesday. Earlier, May’s Industrial Production surprised with figures that represented less contraction than was anticipated. A mix of fewer worries about political shocks and friction, along with improved economic numbers, will make for a resilient shared currency if the ECB gives signs that they will delay further cuts.
MXN ⇓
The Mexican Peso fell by over 1.0% with belief across markets that a Trump victory could weigh on trading partners with planned tariff increases. With nothing lined up in data releases for the week, the Peso’s flows will be dictated by other items in the global growth narrative, which seems to be impacted by the increased likelihood that there is a change of the guard to come to the U.S. in November, just five months away.
