• Richer US data calendar and Fedspeak today

• US stocks in the red again; uptrend intact

• Key inflation reports from both Canada and Australia

• Yen shows signs of life but still close to intervention level

The US dollar remains under pressure against the euro despite the relatively quiet newsflow. Chicago Fed President Goolsbee maintained his relatively dovish stance yesterday with the market focusing more on comments from San Francisco Fed President Daly. This relatively more centrist Fed member confirmed what the market is starting to consider and what one of the big investment houses talked about yesterday: the realistic possibility of the Fed waiting until December to cut rates.

The data will eventually dictate the Fed's actions. This week, the calendar is filled with mostly 2nd tier data with Thursday’s durable goods orders and Friday's PCE report being the most important releases. There is also a plethora of housing sector-related data that includes the new and pending home sales figures and various house prices indicators. Today, the key Conference Board consumer confidence index for June will be released with the hawks hoping for a strong print to justify their current stance. Fed board members Bowman and Cook will be on the wires later today.

The key Conference Board consumer confidence index for June will be released with the hawks hoping for a strong print to justify their current stance.

In the meantime, the dollar is possibly starting to be affected by the campaigning for the November presidential election. On Thursday, the first debate of the two presidential candidates will be held. The rather restrictive setup is unlikely to discourage both sides to put forward their arguments with the Republican candidate possibly hoping to cover some of the lost ground following the recent judicial woes.

Amidst these developments, market participants are trying to come to terms with the fact that equities and, in particular, Nvidia stock can actually drop in price. The S&P 500 index has recorded three consecutive negative sessions, but the overall outlook remains unchanged and, technically, the current uptrend remains intact. The month-end and quarter-end rebalancing could also play a key role this week with all eyes on the big technology stocks.

Market participants are trying to come to terms with the fact that equities can actually drop in price.

The euro is trying to recoup part of its recently lost ground against both the dollar and the pound, despite the lack of positive news. France is counting down to the first round of parliamentary elections this weekend with Le Pen’s far-right party remaining in the lead and Macron’s alliance being a distant third. In addition, following Friday’s very weak PMI surveys, Monday’s business confidence surveys from both Germany and Belgium probably confirm a weak finish in the second quarter of 2024.

Apart from Friday’s US PCE report, monthly inflation figures will be published today from Canada and during tomorrow’s Asian session from Australia. These two countries are probably facing opposite issues as the BoC is expected to cut rates in July and the RBA discussed the possibility of a rate hike at its more recent meeting. This discrepancy is depicted on the aussie/loonie pair trading around 4.5% higher from the early February lows.

With the Summary of Opinions from the latest BoJ meeting showing strong support for further action on rates and for curtailing the bond buying programme, the yen appears to be breathing slightly better today. However, dollar/yen continues to trade a tad below the key 160-yen level with Japanese government officials still refraining from verbally intervening.