The U.S. Dollar is trading in mostly familiar ranges across the board as markets take in the news of trade deals being struck between the U.S. and Japan as well as others such as the Philippines
Overview
Equities seem to be rejoiced to get some positive light on the trading front as the concern over the August 1st deadline for the levying of proposed tariffs to a variety of nations keeps businesses on edge. There is cloudiness when it comes to what else can be accomplished before the date arrives and if it indeed the ultimatum will stick, but a major economy agreeing to new terms is seen as a welcome development.
Earnings reports have been mixed, with some surprise negativity across tech companies such as Texas Instruments, but automotive shares climbing following reports of European automakers coming close to also signing a new accord to facilitate trade without issues going forward. There is optimism in the air but also talks of retaliation from some countries whose leaders feel the pressure is unnecessary. The headlines will be dominated by announcements of these agreements as no major data points will come until next week. Tomorrow’s Purchasing Managers Index for July will be of interest along with Durable Goods Orders on Friday.
What to Watch This Week…
- Purchasing Managers Index Thursday 10AM
- Durable Goods Orders Friday 8:30AM
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR ⇓
The Euro has dropped by close to half a percent following a rally yesterday that was halted by worries over potential for high tariffs coming soon. Although there are reports of European automakers feeling confident about reaching a deal with the U.S., the EU announced readiness for the August 1st deadline with a 30.0% tariff that could be applied to over €100.0 Billion of American products. The back-and-forth will keep markets on edge, but for now, the Buck is staying flat until other achievements are on the wire.
JPY ⇑
The Japanese Yen continued to gain ground over the Buck as confusion over the leadership of the country was overshadowed by the news about the trade deal. Japan has agreed to a 15.0% tariff on all its products imported into the U.S. This also includes vehicles, the largest issue in addressing the trade deficit between the two nations. Meanwhile, Prime Minister Shigeru Ishiba had to deny reports that he was prepared to quit his post. The elections resulted in a loss of power for his party, thus the political uncertainty affecting Japan.
