Markets retreated overnight, with equities softening, while bond yields firmed. The US Dollar inched higher, despite the much weaker than expected inflation readings, of both the US CPI and PPI. This takes the pressure off the Fed, to raise rates and perhaps puts them in the rate cut mode. The new Fed Chairman is finding his feet, but he appears to be a believer in a lower rate environment, to stimulate the economy. US economic data is coming in strong, with the Philly Fed Survey monstering expectations and surging into positive territory. US Retail Sales were also positive, up 0.2% for June and 6.7% annually. The firmer US Dollar allowed the EUR to retreat back to 1.1430, while the GBP slumped to 1.3450.The stronger reserve halted the recovery of commodity currencies, with the AUD retreating from 0.7000, while the NZD dipped below 0.5850. Markets are not as focused on the Middle East war, but escalations that push oil prices into dangerous territory, will have a negative impact.
