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The Australian dollar started the day quietly, but a solid US inflation release has sent the Aussie considerably lower. Currently, AUD/USD is trading at 0.7431, down 0.53% on the day.

US inflation shines

US consumer inflation rose sharply in June. Core CPI climbed 0.9% YoY, well above the estimate of 0.4% and ahead of the May read of 0.7%. On an annualized basis, Core CPI jumped 4.5%, above the consensus of 4.0% and up from the May reading of 3.8%.

The strong numbers have lifted the US dollar, as speculation grows that the Federal Reserve may be forced to tighten policy sooner and more aggressively than expected in order to curb inflation from getting out of control. The Fed has long maintained that that inflation is transitory, but the markets are likely to become more skeptical as CPI continues to surge. US Treasury yields have been falling sharply, reflecting fears that the Fed might overshoot its inflation target of 2%.

Australian business activity slowed in June, due to a resurgence of Covid cases which resulted in lockdowns in New South Wales and Victoria. The NAB index of business conditions dropped from 36 to 24, while business confidence fell to 11, down from 20 points.

Despite the drop, business activity remains at high levels, buoyed by the economy’s robust recovery. The government has been very strict in its clampdown on Covid, as the latest resurgence numbers less than 100 cases. Businesses have been able to bounce back after lockdowns were eased, so expectations are for business conditions to rebound if the latest lockdown is relatively short.

Things are looking less rosy on the consumer front. Westpac Consumer Sentiment has posted back-to-back declines, and another drop could weigh on the sleepy Australian dollar. The July reading will be released on Wednesday (00:30 GMT).

AUD/USD Technical

• There is support at 0.7400. This line is weakening as AUD/USD is losing ground. Below, we find support at 0.7311
• On the upside, there is resistance at 0.7589 and 0.7689

Headline inflation up 5.4% in June from year-ago and core (ex-food and energy) up 4.5%
Base effects continue to be at play; transportation related prices surged again
Price gain still relatively narrowly based; more guidance on tapering from Fed in August

US headline inflation in June beat consensus estimates for the third month in a row, posting a 5.4% year over year increase, or 0.9% from May. 'Base-effects' still account for much of the rise - energy prices were up 24.5% in June versus very low year ago levels, although that pace was slightly slower than the April and May increases. Prices for used cars and trucks also rose sharply again, accounting for a third of the month over month gain.

Travel demand in the US, by road and air, bounced back more quickly than expected as virus containment measures eased. Passenger volume on inter-state highways rose to pre-pandemic levels by early June, and TSA throughput showed air travel back at over 85% of pre-pandemic levels as of last week. That's all leading to a surge in prices for transportation related goods and services beyond just higher gasoline prices. Airfares, despite still below pre-pandemic levels have made big gains recently, and prices for used cars and car rentals have surged around 40% and 70%, respectively, ahead of pre-pandemic levels.

Indeed, vehicle prices accounted for more than half of the 4.5% year-over-year 'core' (ex-food & energy) price gain in June. Excluding those, the core index is only now catching up to pre-pandemic trend levels. The fact that price growth has not been particularly broadly-based is why Federal Reserve policymakers will probably continue to look through firmer headline CPI growth as 'transitory' for now. In the meantime, a stronger footing of the economic rebound is more likely to be what had prompted the Fed to start early discussion on tapering, with further guidance possibly coming at the Jackson Hole gathering next month. Market based inflation measures ticked up slightly this morning after the CPI release.

Daily Pivots: (S1) 109.81; (P) 110.03; (R1) 110.33; More...

Intraday bias in USD/JPY remains neutral at this point. And risk stays on the downside with 111.65 resistance intact. On the downside, break of 109.52, and sustained trading below 55 day EMA (now at 109.82) will suggest that it's at least correcting the rise from 102.58. Deeper fall would be seen to 38.2% retracement of 102.58 to 111.65 at 108.18 next.

In the bigger picture, medium term outlook is staying neutral with 111.71 resistance intact. Though, as notable support was seen from 55 day EMA, rise from 102.58 is mildly in favor to extend higher. Decisive break of 111.71/112.22 resistance will suggest long term bullish reversal. Rise from 101.18 could then target 118.65 resistance (Dec 2016) and above. However, sustained break of 55 day EMA would revive some medium term bearishness, and open up deep fall back towards 102.58 support.

Daily Pivots: (S1) 0.9132; (P) 0.9152; (R1) 0.9170; More....

Intraday bias in USD/CHF is turned neutral with current recovery. On the downside, sustained trading below 55 day EMA (now at 0.9123) will affirm the case that rebound from 0.8925 has completed at 0.9273. Deeper fall would then be seen back to retest 0.8925 low. On the upside though, break of 0.9273 and sustained trading above 61.8% retracement of 0.9471 to 0.8925 at 0.9262 will target 0.9471 resistance next.

In the bigger picture, medium term outlook is currently neutral with focus on 0.9471 resistance. Sustained break there will indicate completion of whole decline from 1.0342 (2016 high). Medium term outlook will be turned bullish for a test on 1.0342 high. But, rejection by 0.9471 again will revive bearishness for another fall through 0.8756 low.

Daily Pivots: (S1) 1.3845; (P) 1.3878; (R1) 1.3916; More....

GBP/USD drops notably but stays in range above 1.3730. Intraday bias remains neutral first. On the downside, break of 1.3730 will resume the fall from 1.4248, as the third leg of the consolidation pattern from 1.4240, to 1.3668 support and possibly below. On the upside, break of 1.4000 will turn bias back to the upside for retesting 1.4240/8 resistance zone instead.

In the bigger picture, as long as 1.3482 resistance turned support holds, up trend from 1.1409 should still continue. Decisive break of 1.4376 resistance will carry larger bullish implications and target 38.2% retracement of 2.1161 (2007 high) to 1.1409 (2020 low) at 1.5134. However, firm break of 1.3482 support will argue that the rise from 1.1409 has completed and bring deeper fall to 1.2675 support and below.

Daily Pivots: (S1) 1.1838; (P) 1.1859; (R1) 1.1882; More...

EUR/USD dips notably in early US session, but stays above 1.1780 temporary low. Intraday bias remains neutral first. Considering bullish convergence condition in 4 hour MACD, beak of 1.1894 minor resistance will indicate short term bottoming at 1.1780. Corrective pattern from 1.2348 might have completed too. Intraday bias will be turned back to the upside for 1.1974 resistance for confirmation. Sustained break there will pave the way back to 1.2265/2348 resistance zone. On the downside, break of 1.1780 will extend the correction to retest 1.1703 support instead.

In the bigger picture, rise from 1.0635 is seen as the third leg of the pattern from 1.0339 (2017 low). Further rally could be seen to cluster resistance at 1.2555 next, (38.2% retracement of 1.6039 to 1.0339 at 1.2516). This will remain the favored case as long as 1.1602 support holds. Reaction from 1.2555 should reveal underlying long term momentum in the pair. However sustained break of 1.1602 will argue that the rise from 1.0635 is over, and turn medium term outlook bearish again.

Dollar rebounds strongly in early US session after much stronger than expected CPI inflation reading. The headline reading has indeed been trend up every month since January and showed no sign of slowing yet. Yen also rebounds following the greenback. Meanwhile Sterling and Canadian Dollar are the weakest ones for today for the moment.

Technically, focus will now be on near term resistance for the greenback. In particular, levels to watch include 1.1780 support in EUR/USD, 1.3730 support in GBP/USD, 0.7480 support in AUD/USD, and 1.2589 resistance in USD/CAD. Dollar will need to overcome these levels to confirm that it's resuming near term rally. Otherwise, the moves are just seen as another leg inside range patterns.

In Europe, at the time of writing, FTSE is up 0.09%. DAX is down -0.01%. CAC is down -0.09%. Germany 10-year yield is down -0.002 at -0.295. Earlier in Asia, Nikkei rose 0.52%. Hong Kong HSI rose 1.63%. China Shanghai SSE rose 0.53%. Singapore Strait Times rose 0.63%. Japan 10-year JGB yield dropped -0.0043 to 0.025.

US CPI surged to 5.4% yoy in June, core CPI jumped to 4.5% yoy

US CPI rose 0.9% mom in June, well above expectation of 0.5% mom. That's the largest monthly rise since June 2008. CPI core rose 0.9% mom, also above expectation of 0.5% mom.

Over the last 12 months, headline CPI accelerated to 5.4% yoy, up from 4.0% yoy, above expectation of 4.9% yoy. That's the highest annual rate since August 2008. CPI core jumped to 4.5% yoy, up from 3.8% yoy, above expectation of 4.0% yoy.

Fed Bullard: The time is right to pull back emergency measures

St. Louis Fed President James Bullard said in a WSJ interview, "I think with the economy growing at 7% and the pandemic coming under better and better control, I think the time is right to pull back emergency measures."

But he added, "we do want to do it gently and carefully" on tapering asset purchases. "But I think we're in a very good position to start a taper. I don't need to get going tomorrow, but I think we're—I think we're in very good shape for this".

Bullard also said recent fall in bond yields was a "bullish" development. He's "comfortable with the idea that the economy will continue to grow very robustly through the second half of this year, and go through the first half of 2022, and all of 2022."

ECB Lagarde: It's now a simple, solid, symmetric 2% inflation target

In an FT interview, ECB President Christine Lagarde said the old inflation target of "below, but close to, two per cent" was "vaguely ambiguous and a little bit complex".  The target with the new strategy was a "simple, solid, symmetric two per cent target"

The 2% target now is "solid because it gives us space to manoeuvre our monetary policy, it is a well-accepted measurement of price stability around the world and it limits the welfare cost of too high inflation."

She added that the third "s" of symmetry is really important, because "we affirm very clearly that there may be deviations up or down... we know that it's not going to be a straight two per cent linearly forever once we reach the target and we'll recognise that it will oscillate around two per cent. "

Lagarde also said ECB's policy rebound will be especially forceful or persistent", intending to signal that" we will not prematurely tighten".

Released in European session, Germany CPI was finalized at 0.4% mom, 2.3% yoy in June. France CPI was finalized at 0.2% mom, 1.9% yoy in June. Swiss PPI came in at 0.3% mom, 2.9% yoy in June.

Australia NAB business confidence dropped to 11, conditions dropped to 24

Australia NAB Business Confidence dropped from 20 to 11 in June. Business Conditions dropped from 36 to 24. Trading conditions dropped from 45 to 35. Profitability conditions dropped from 39 to 25. Employment conditions dropped from 25 to 17.

"After reaching a record high last month, business conditions pulled back in the month. The decline in conditions was broad-based across states but led by a significant decline in Victoria coming off the back of the lockdown that started in late May but was eased, in a series of steps, over June" said NAB.

"Confidence took a hit in the month with the survey undertaken in the week of the NSW lockdown and with some overlap to brief shutdowns in the smaller capitals. The threat of closing borders also appears to have weighed everywhere".

China exports rose 32.2% yoy in June, imports rose 23.1% yoy, trade surplus widened to USD 51.5B

In USD terms, China's total trade rose 34.2% yoy to USD 511.3B in June. Exports rose 32.2% yoy to USD 281.4B, versus expectation of 23.1% yoy. Imports rose 36.7% yoy to USD 229.9B, versus expectation of 30.0% yoy. Trade surplus widened to USD 51.5B, above expectation of USD 44.4B.

Year-to-June, total trade with EU rose 37.0% yoy to USD 388.2B. Exports to EU rose 35.9% yoy to USD 233.0B. Imports from EU rose 38.8% yoy to USD 155.2B. Trade surplus came in at USD 78B.

Year-to-June, total trade with US rose 45.7% yoy to USD 340.8B. Exports to US rose 42.6% yoy to 252.9B. Imports from US rose 55.5% yoy to USD 87.9B. Trade surplus came in at USD 165B.

Year-to-June, total trade with Australia rose 35.0% yoy to USD 107.4B. Exports to AU rose 30.0% yoy to 29.7B. Imports from AU rose 37.0% yoy to AUD 77.7B. Trade deficit came in at USD -48B.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1838; (P) 1.1859; (R1) 1.1882; More...

EUR/USD dips notably in early US session, but stays above 1.1780 temporary low. Intraday bias remains neutral first. Considering bullish convergence condition in 4 hour MACD, beak of 1.1894 minor resistance will indicate short term bottoming at 1.1780. Corrective pattern from 1.2348 might have completed too. Intraday bias will be turned back to the upside for 1.1974 resistance for confirmation. Sustained break there will pave the way back to 1.2265/2348 resistance zone. On the downside, break of 1.1780 will extend the correction to retest 1.1703 support instead.

In the bigger picture, rise from 1.0635 is seen as the third leg of the pattern from 1.0339 (2017 low). Further rally could be seen to cluster resistance at 1.2555 next, (38.2% retracement of 1.6039 to 1.0339 at 1.2516). This will remain the favored case as long as 1.1602 support holds. Reaction from 1.2555 should reveal underlying long term momentum in the pair. However sustained break of 1.1602 will argue that the rise from 1.0635 is over, and turn medium term outlook bearish again.

Economic Indicators Update

US CPI rose 0.9% mom in June, well above expectation of 0.5% mom. That's the largest monthly rise since June 2008. CPI core rose 0.9% mom, also above expectation of 0.5% mom.

Over the last 12 months, headline CPI accelerated to 5.4% yoy, up from 4.0% yoy, above expectation of 4.9% yoy. That's the highest annual rate since August 2008. CPI core jumped to 4.5% yoy, up from 3.8% yoy, above expectation of 4.0% yoy.

Full release here.

Notes/Observations

• Focus on US Jun CPI data to be released in session to see if the acceleration in recent price pressure begins to lose some momentum.
• Fed Chair Powell's semi-annual testimony on Wednesday in Congress.
• Continue to watch whether the Delta coronavirus variant could wreak havoc in economies where vaccination rollouts are significantly less advanced.
• US financial earnings in focus (JPMorgan, Goldman); other companies due to report during the NY morning include ConAgra Brands, Fastenal, First Republic Bank, Pepsico.

Asia

• China Jun Trade Balance: $51.5B v $44.8Be; Exports Y/Y: 32.2% v 23.0%e; Imports Y/Y: 36.7% v 29.5%e.
• China Customs Dept spokesman Li stated that imports and exports were expected to slow in H2 due to a higher base in 2020; imported inflation risks were manageable.
• Former PBOC Official Sheng Songcheng noted that RRR cut affords China room to deal with shifts in US Fed policy; Economic recovery remained insufficient and imbalanced.

Coronavirus

• Israel will become 1st country in the world to offer a 3rd booster shot to adults as Covid infections increase.
• Sydney: Will be locked down for another 4-6 weeks.

Europe

• ECB Chief Lagarde said to warn Council may face split related to the implementation of new strategy.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

• Indices [Stoxx600 -0.07% at 460.48, FTSE +0.24% at 7,142.85, DAX -0.08% at 15,778.45, CAC-40 -0.23% at 6,544.20, IBEX-35 -0.73% at 8,752.00, FTSE MIB -0.28% at 25,211.50 , SMI -0.44% at 12,029.00 , S&P 500 Futures 0.00%].
• Market Focal Points/Key Themes: European indices open mixed but acquired a downward bias as the session wore on; sectors among better performers are materials and telecom; while underperformers include health care and utilities; unofficial start of Q2 earnings season; BOE announces lifting of dividend restrictions on banking firms; D’Ieteren sells stake in Belron unit; companies scheduled to report in the US session include Pepsico, Fastenal, Goldman Sachs, and Telekom Austria.

Equities

• Consumer discretionary: D'Ieteren [DIE.BE] +21% (divests stake), Swatch [UHR.CH] +2% (earnings).
• Financials: Lloyds [LLOY.UK] +2% (BoE dividend guidance).
• Industrials: Gerresheimer [GXI.DE] -6% (earnings).
• Technology: Nokia [NOKIA.FI] +6% (raises outlook).

Speakers

• BOE Financial Stability Report noted that the UK banking sector remained resilient; to remain vigilant to debt vulnerabilities. Financial Policy Committee (FPC) measures able to limit rapid debt buildup. The banking sector should use all capital buffers to support recovery. Counter-cyclical capital buffer (CCYB) will not increase until Q4 2022 at the earliest.
• BOE Gov Bailey stated that the Financial Policy Committee (FPC) to remains committed to the implementation of robust prudential standards in the country. The domestic economy was recovering but remained weak. Asset valuations could adjust sharply if markets re-evaluate prospects for growth, inflation or interest rates. Prepared to have discussions with EU on equivalence but nothing was happening on that front.
• BoE Dep Gov Woods noted that ending curbs on dividends was a fairly easy decision and expected banks to be sensible on dividends.
• BOE's Cunliffe stated that structural factors and govt support were driving up housing prices. Watching housing sector closely and were not complacent; keeping eye on the link between prices and debt. Committed to out-come based equivalence; decision for EU was whether firms should use UK-based clearinghouses. Could not have EU decision on clearing that leads to stress and disorder in markets; must be orderly.
• France Fin Min Le Maire reiterated the stance that economic rebound is stronger than expected; Raises 2021 GDP growth from 5.0% to 6.0%.
• Poland MPC Member Ancyparowicz stated that the MPC was divided on how to address inflation.
• China PBOC monetary policy Dept chief Sun Guofeng stated that the domestic economy was moving ahead steadily. The price level was basically under control.
• China PBOC spokesperson Ruan Jianhong reiterated PBoC's prudent monetary policy stance; to be flexible, targeted, and appropriate. To base policy upon domestic price levels and economic conditions. Price level was basically under control. The rise in PPI data was transitory and affected by external sources; to ease in Q4 and into 2022. Stated that the macro leverage ratio is expected to be stable. The recent RRR cut to help lowering aggregate financing costs.
• IEA Monthly Oil Report maintained a forecast of global oil demand returning to pre-pandemic levels by end-2022. Maintained 2021 global oil demand growth at 5.4M BPD while trimming 2022 global oil demand growth from 3.1M BPD to 3.0M BPD. It noted that escalating covid infections in a number of countries remained a key downside risk. Oil markets likely to remain volatile until there was clarity on OPEC+ production policy. The probability of a market share battle by producers remotely hung over the market.

Currencies/Fixed Income

• USD was steady ahead of the Jun US CPI data. Markets waiting to see if the recent acceleration in price pressures began to lose some momentum.
• EUR/USD steady at 1.1845; GBP/USD at 1.3860.
• USD/ZAR saw the ZAR currency (Rand) at 3-month lows as days of riots broke out the following the arrest of former President Zuma. South Africa’s government deployed soldiers to stem rioting that has shuttered business and disrupted transport networks.
• China 10-year govt bond yield hit a one-year low after PBOC monetary policy Dept chief Sun Guofeng commented that policies to be based on the domestic price level and economic conditions.

Economic data

• (SE) Sweden Jun PES Unemployment Rate: 3.7 v 3.6% prior.
• (FI) Finland May Current Account Balance: +€0.3B v -€0.6B prior.
• (DE) Germany Jun Final CPI M/M: 0.4% v 0.4%e; Y/Y: 2.3% v 2.3%e.
• (DE) Germany Jun Final CPI EU Harmonized M/M: 0.4% v 0.4%e; Y/Y: 2.1% v 2.1%e.
• (RO) Romania Jun CPI M/M: 0.3% v 0.4%e; Y/Y: 3.9% v 3.7%e.
• (CH) Swiss Jun Producer & Import Prices M/M: 0.3% v 0.8% prior; Y/Y: 2.9% v 3.2% prior.
• (FR) France Jun Final CPI M/M: 0.1% v 0.2% prelim; Y/Y: 1.5% v 1.5% prelim; CPI (ex-tobacco) Index: 105.48 v 105.52e.
• (FR) France Jun Final CPI EU Harmonized M/M: 0.2% v 0.2%e; Y/Y: 1.9% v 1.9%e.
• (ES) Spain May House transactions Y/Y: 107.6% v 65.9% prior.
• (CZ) Czech Jun CPI M/M: 0.5% v 0.4%e; Y/Y: 2.7% v 2.8%e.
• (CZ) Czech May Export Price Index Y/Y: 1.0% v 1.1% prior; Import Price Index Y/Y: 1.5% v 0.3% prior.
• (TR) Turkey May Industrial Production M/M: +1.3% v -0.4%e; Y/Y: 40.7% v 37.2%e.

Fixed income Issuance

• (EU) European Union opened the book to sell EUR-denominated 10-year and 20-year NextGeneration bonds. To sell €5.25B in 10-year notes; guidance saw -4bps to mid-swaps; to sell €10B in 20-year bonds; guidance seen +9bps to mid-swaps.
• (UK) DMO opened the book to sell new 1.125% Jan 2039 Gilts via syndicate; guidance saw +8.5-9.0bps to 2038 Gilt; spread set at 8.5bps; order book £60B.
• (ID) Indonesia sold total IDR12.5T vs. IDR11.0T target in Islamic bills and bonds (sukuk).
• (NL) Netherlands Debt Agency (DSTA) sold €2.42B vs. €1.5-2.5B indicated range in 3.75% Jan 2042 DSL bond; Avg Yield: 0.113% v 0.984% prior.
• (ES) Spain Debt Agency (Tesoro) sold a total of €1.804B vs. €1.0-2.0B indicated range in 3-month and 9-month bills.
• (IT) Italy Debt Agency (Tesoro) sold a total €9.0B vs. €8.0-9.0B indicated range in 3-year, 7-year, and 15-year BTP Bonds.
• Sold €4.5B vs. €4.0-4.5B indicated range in new 0.00% Aug 2024 BTP; Avg Yield: -0.19% v -0.22% prior Bid-to-cover: 1.34x v 1.35x prior (Jun 10th 2021 under 0.00% Apr 2024 BTP).
• Sold €2.75B vs. €2.25-2.75B indicated range in 0.50% July 2028 BTP; Avg Yield: 0.38% v 0.46% prior; bid-to-cover: 1.5x v 1.48x prior (Jun 10th 2021).
• Sold €1.75B vs €1.25-1.75B in 0.95% Mar 2037 BTP; Avg Yield: 1.19% v 1.26% prior; bid-to-cover: 1.54x v 1.47x prior.

Looking Ahead

• (PT) Portugal Debt Agency (IGCP) reverse auction.
• 05:15 (CH) Switzerland to sell 3-month Bills; Avg Yield: % v % prior.
• 05:25 (EU) Daily ECB Liquidity Stats.
• 05:30 (ZA) South Africa May Total Mining Production M/M: 0.0%e v 0.3% prior; Y/Y: 31.5%e v 116.5% prior; Gold Production Y/Y: No est v 177.9% prior; Platinum Production Y/Y: No est v 276.1% prior.
• 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.
• 05:30 (DE) Germany to sell €5.0B in 0% Jun 2023 Schatz.
• 05:30 (BE) Belgium Debt Agency (BDA) to sell €2.6-3.0B in 3-month and 12-month bills.
• 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).
• 05:30 (ZA) South Africa to sell combined ZAR3.9B in 2035, 2037 and 2048 bonds.
• 06:00 (US) Jun NFIB Small Business Optimism Index: 99.5e v 99.6 prior.
• 06:00 (IL) Israel Jun Trade Balance: No est v -$3.1B prior.
• 06:00 (TR) Turkey to sell 3% Inflation-linked 2031 Bonds.
• 06:30 (EU) ESM to sell €1.1B in 12-month Bills.
• 06:45 (US) Daily Libor Fixing.
• 07:00 (CZ) Czech Central Bank to comment on CPI data.
• 08:00 (BR) Brazil May IBGE Services Sector Volume Y/Y: 22.1%e v 19.8% prior.
• 08:00 (UK) Daily Baltic Dry Bulk Index.
• 08:30 (US) Jun CPI M/M: 0.5%e v 0.6% prior; Y/Y: 4.9%e v 5.0% prior.
• 08:30 (US) Jun CPI Jun (ex-food/energy) M/M: 0.4%e v 0.7% prior; Y/Y: 4.0%e v 3.8% prior.
• 08:30 (US) Jun CPI Index NSA: 270.696e v 269.195 prior; CPI Core Index (seasonally adj): 277.034e v 275.718 prior.
• 08:30 (US) Jun Real Avg Weekly Earnings Y/Y: No est v -2.2% prior; Real Avg Hourly Earning Y/Y: No est v -2.8% prior.
• 08:55 (US) Weekly Redbook LFL Sales data.
• 09:00 IMF World Economic Outlook (WEO): 2021 GDP currently seen at 6.00%.
• 09:00 (EU) Weekly ECB Forex Reserves.
• 09:00 (SE) Sweden Central Bank (Riksbank) Gov Ingves participates on panel.
• 09:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).
• 09:45 (UK) BOE to buy £1.147B in APF Gilt purchase operation(20 years+).
• 10:00 (MX) Mexico Weekly International Reserve data.
• 11:30 (US) Treasury to sell 52-Week and 26-Week Bills.
• 12:00 (US) Fed’s Kasjkari.
• 13:00 (US) Treasury to sell 30-Year Bonds Reopening.
• 14:00 (US) Jun Monthly Budget Statement: -$205.0Be v -$132.0B prior.
• 16:30 (US) Weekly API Oil Inventories.
• 17:00 (KR) South Korea Jun Import Price Index M/M: No est v 2.6% prior; Y/Y: No est v 13.8% prior.
• 17:00 (KR) South Korea Jun Export Price Index M/M: No est v 1.5% prior; Y/Y: No est v 12.3% prior.
• 18:45 (NZ) New Zealand May Net Migration: No est v 1.0K prior.
• 19:00 (KR) South Korea Jun Unemployment Rate: 3.8%e v 3.8% prior.
• 20:00 (SG) Singapore Q2 Advance GDP Q/Q: -1.8%e v +3.1% prior; Y/Y: 14.6%e v 1.3% prior.
• 20:30 (AU) Australia July Consumer Confidence: No est v -5.2% prior.
• 22:00 (NZ) Reserve Bank of New Zealand (RBNZ) Interest Rate Decision: Expected to leave Official Cash Rate (OCR) unchanged at 0.25%.
• 23:00 (CN) China to sell 2-year and 5-year upsize Bonds.

St. Louis Fed President James Bullard said in a WSJ interview, "I think with the economy growing at 7% and the pandemic coming under better and better control, I think the time is right to pull back emergency measures."

But he added, "we do want to do it gently and carefully" on tapering asset purchases. "But I think we're in a very good position to start a taper. I don't need to get going tomorrow, but I think we're—I think we're in very good shape for this".

Bullard also said recent fall in bond yields was a "bullish" development. He's "comfortable with the idea that the economy will continue to grow very robustly through the second half of this year, and go through the first half of 2022, and all of 2022."