US Dollar Remains Firm, Sends Yuan, Rupee, Sterling And Kiwi To New 2018 Lows

Trade tensions have not gone away, but they have eased slightly. Chinese officials seem to be playing down the "Made in China 2025" rhetoric as it antagonizes the US. At the same time, Trump rejected the war-camp's advocacy of a new procedure to scrutinize Chinese purchases of US companies. Trump has agreed to strengthen the existing Committee on Foreign Investment in the US (CFIUS). However, reports indicate that that Chinese direct investment in the US has fallen sharply in H1 18 to less than $2 bln from around $46 bln in H1 17. 

The US session features weekly initial jobless claims, the KC Fed survey (June) and another look at Q1 GDP. These are not market movers. Investors will be interested in the second part of the Fed's stress tests and today's announcement involves how much the banks can pay out to investors in the form of dividend and stock buybacks. Some banks want to return more than they made. Tomorrow the US reports May personal income and consumption figures, which will inform Q2 GDP forecasts. The core PCE deflator, for which the Fed aims for 2%, is expected to tick up to 1.9% from 1.8%. 

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Read more by Marc on his site Marc to Market.

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