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Asian equity markets had a mixed performance as ongoing economic concerns in China partially offset positive sentiment from strong bank earnings in the US and dovish commentary from the European Central Bank. The Nikkei 225 outperformed, rising by 0.8% following comments from Bank of Japan Governor Ueda, suggesting that a policy tweak is unlikely at the upcoming monetary policy meeting. However, the Hang Seng and Shanghai Composite were lower, impacted by losses in the tech sector and a non-committal tone in the mainland amid ongoing economic challenges and recent support measures.

In the UK, June's CPI inflation data came in lower than expected, marking the first downside surprise in five months. The annual headline rate fell to 7.9% from 8.7% in May, while the core rate of inflation unexpectedly dropped to 6.9% from 7.1%. The decline in overall inflation was primarily driven by lower petrol prices, as well as easing inflation in categories such as food, furniture and household goods, and hotels and restaurants. Despite the decline, UK inflation remains significantly higher than levels seen in the US and the Eurozone. Investor attention will be on Bank of England Deputy Governor Ramsden's speech later today, where he will discuss quantitative tightening (QT), the process of unwinding quantitative easing. Markets will be listening for any indications on the pace of reduction in the Bank's asset holdings in the coming months.

In the Eurozone, investors will focus on the final reading of June's CPI is due, providing additional detail compared to the preliminary estimate. The flash estimate showed a decline in headline inflation to 5.5% from 6.1% in May, driven by lower energy and food prices. However, core inflation, excluding energy and food, increased to 5.4%, primarily led by a rebound in services prices. The elevated core inflation rates make it highly likely that the ECB will increase interest rates at the next policy update.

Stateside, the housing sector has been impacted by higher interest rates, and today's housing starts and building permits data will provide insights into the sector's recent performance. Yesterday's retail sales report showed resilient consumer demand, and market participants will be interested to see if the housing data support that trend.
 

CFTC Data As Of 14-07-23

• USD net spec short fell a touch in the Jul 5-11 period as $IDX slid 1.37%
• Fairly serious moves among majors w/hardly any position changes
• Suggest a fair amount of position replacement as specs were getting stopped
• EUR$ +1.2% in period, specs -2,675 contracts into strength now +140,162
• $JPY -2.84% in period after breaching 145 last wk, specs buy 738 contracts
• GBP$ +1.73% as BoE seen a cointoss for +50bp Aug 3, specs +7,798 now +58,063
• CHF specs relatively active -4,503 contracts now short 7,907
• $CAD +0.06%, Aussie -0.06% specs sell less than 1k contracts
• BTC fell a scant 0.74%, specs +221 on dip now short 1,855 contracts(Source: Reuters)
   

FX Options Expiries For 10am New York Cut 

(1BLN+ represent larger expiries, more magnetic when trading within daily ATR)

• EUR/USD: 1.1200 (565M), 1.1235 (251M), 1.1250 (1.6BLN), 1.1270-80 (513M)
• USD/CHF: 0.8550 (710M)
• GBP/USD: 1.2890 (232M), 1.3000 (346M), 1.3090-1.3100 (335M)
• AUD/USD: 0.6775 (200M), 0.6800 (200M). EUR/AUD: 1.6400 (1BLN)
• USD/CAD: 1.3065 (384M), 1.3115 (200M), 1.3180-90(283M), 1.3220-25 (369M)
• USD/JPY: 138.00 (687M)
   

Overnight Newswire Updates of Note

• Asia Stocks Split As US-China Outlooks Diverge
• New Zealand Inflation Slows Less Than Forecast In Second Quarter
• China’s Slowing Price Growth Doesn’t Mean Deflation - Eco. Daily
• China Banks To Gradually Cut Mortgage Rate On PBoC Push - Paper
• Australia Jobs Gauges, Pessimistic Households Signal RBA Caution
• Tokyo Traders Eye Key CPI Data As They Mull Bets On BoJ Tweaks
• Japan Companies Less Confident About Business Conditions
• ADB Trims 2024 Growth Outlook For Asia On Rate Hike Effects
• Fed's Last Rate Hike Coming At July Meeting, Economists Say - RTRS Poll
• UK-Listed Company Profit Warnings Rise For Seventh Consecutive Quarter
• JPMorgan Says Market Fails To Reflect Threat To Dollar Dominance
• Mizuho: BoJ Unlikely To Tweak Policy Amid Forward Guidance Focus
• China Growth Risks Hurt Asia Stocks; Yen Lower Wednesday
• ASML Reports Q2 Earnings Of 1.9 Billion Euros, Beating Expectations
• Microsoft To Charge $30 Per Month For Generative AI Features
• Rio Tinto Warns On Global Slowdown Risks, Production Issues

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
 

Technical & Trade Views

SP500 Intraday Bullish Above Bearish Below 4540

• Below 4520 opens 4460
• Primary support is 4370
• Primary objective is 4630
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

EURUSD Intraday Bullish Above Bearsih Below 1.12

• Below 1.1150 opens 1.1050
• Primary support is 1.10
• Primary objective is 1.13
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

GBPUSD: Intraday Bullish Above Bearish Below 1.30 

• Below 1.2830 opens 1.2710
• Primary support  is 1.26
• Primary objective 1.3850
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

USDJPY Bullish Above Bearish Below 139.60

• Above 139.60 opens 141.80
• Primary resistance 142
• Primary objective is 136.20
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

AUDUSD Intraday Bullish Above Bearish Below .6800

• Below .6795 opens .6750
• Primary support  is .6448
• Primary objective is .7000
• 20 Day VWAP bearish, 5 Day VWAP bullish

(Click on image to enlarge)

BTCUSD Intraday Bullish Above Bearish below 30000 

• Below 29400 opens 28600
• Primary support  is 28400
• Primary objective is 32750
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

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