Daily Market Update

Dollar Losing on Durable Goods; Fed Speakers Tomorrow

June 26, 2017



The U.S. has opened this week’s trading in familiar ranges against the majority of its counterparts. After a fairly light economic docket last week, this week sees the release of significant data and a number of Federal Reserve speakers.

This morning, Durable Goods orders disappointed and has put the greenback on its back-foot. All goods meant to last three years or more fell 1.1% in May, missing already dismal expectations of a 0.6% contraction. Orders excluding volatile transportation also missed estimates, gaining only 0.1%. Dallas Fed manufacturing will be released later this morning.

Consumer sentiment and the Richmond Fed will cross the wires tomorrow morning, but tomorrow’s headline event will be Janet Yellen’s speech on Global Economic Issues in London. The Fed’s Williams, Harker and Kashkari will also all give prepared statements tomorrow. Pending home sales are due out Wednesday morning followed by the final reading or first quarter GDP on Thursday morning which is expected to confirm sluggish growth of 1.2%.



The Euro was range bound over the weekend, but is ticking slightly higher in early trading following disappointing American data. German business sentiment surged to a record high in June, according to the IFO. Business expectations, a gauge for future sentiment, also improved. While the data has had little effect on currency markets, it is a welcome sign for German Chancellor Angela Merkel who will be trying to hold her position in elections in September.

The good news in Germany was balanced out by warning signs in Italy. The Italian government has committed 17 billion euro to prop up two banks that are either failing or likely to fail. Italy is trying to get a head of a possible banking crisis in Europe’s third largest economy.



The British pound experienced some jerky ranges overnight. The sterling finally found some support on confirmation that Prime Minister Theresa May has struck a deal with the Northern Irish DUP party which will allow her minority government to advance its agenda in parliament. Expect the knee-jerk pop for the sterling to be short-lived as May will only hold a slight advantage in parliament.

Brexit negotiation news will continue to be a slow trickle. The Bank of England will deliver its Financial Stability Report tomorrow.

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