USD
Treasuries slid as stocks rebounded and recouped Mondays losses as EURUSD closed the day down 0.3% from Tuesdays open. Vice-president Kamala Harris and her newly announced running mate Tim Walz made their maiden joint appearance at a Democratic party rally. An NPR/PBS News/Marist poll found the VP leading Donald Trump 51% to 48%.
EUR
Bunds edged lower for a third day as investors continue to unwind haven buying amid gains in euro-area equity futures. Money markets trimmed ECB rate-cut bets across outcomes through to April 2025, pricing 68bps of easing by year-end compared to 71bps on Tuesday. German industrial production rose in June, offering some good news for Europe’s largest economy after it unexpectedly shrank last quarter.
GBP
GBPEUR has reversed all of its second quarter gains this morning, however Goldman Sachs thinks that the trend for the currency pair is still higher and that the Bank of England’s interest rate policy can only weigh on the pair for so long. Sterling has fallen almost two percent against the euro, slicing through its 50 and 100-day moving averages and multiple other technical support levels, as the speculative market cut back its largest net long position. UK house prices picked up after a three month lull, gaining at the strongest pace since January in a further signal that the market is coping with elevated interest rates. Halifax said the average price of a UK home rose 0.8% in July to £291,268.
JPY
The yen dropped against all G10 peers after the Bank of Japan Deputy Governor Shinichi Uchida signalled that the central bank won’t tighten policy rates if financial markets are unstable. USD/JPY rose as much as 2.5% yesterday, the most since January 2023. The pair rose on leveraged and macro fund demand following the comments.
