US Dollar Strengthens on Services Data
The New York session saw the Dollar extend gains after the S&P Global Services PMI for June rose to 52.8, beating consensus estimates of 51.5. The print signaled continued expansion in the services sector, easing concerns about an abrupt growth slowdown. Treasury yields climbed in response, with the 10-year yield rising to a one-week high, supporting Dollar demand against most major counterparts. Market participants are now pricing a 65% chance of a Fed rate hold in July, with the odds of a September cut slipping to under 50%.
Currency Divergence Emerges
Currency flows reflected the divergent central bank outlooks. The Euro weakened modestly against the Dollar as traders adjusted expectations for ECB easing ahead of Thursday's policy minutes. Meanwhile, the Mexican Peso outperformed on continued nearshoring optimism, with manufacturing exports showing resilience. The Japanese Yen remained under pressure as Tokyo equities slipped, limiting safe-haven demand. EM currencies broadly lagged, with the South African Rand and Turkish lira facing selling pressure as global risk sentiment turned cautious.
Equities Mixed as Tech Rally Fades
US equity indices traded with a mixed bias. The S&P 500 hovered near flatline as technology gains were offset by weakness in consumer discretionary and industrial names. The Nasdaq outperformed modestly, buoyed by semiconductor stocks following positive guidance from a major chipmaker. The Russell 2000 lagged, reflecting敏感性 to Treasury yield moves and growth concerns. European markets closed lower, with the STOXX 600 slipping 0.4% as investors digested weaker-than-expected German factory orders data.
Commodities and Crypto Update
Crude oil held steady near $78 per barrel as API inventory data showed a drawdown, though demand fears capped gains. Natural gas rallied on cooler weather forecasts for the US East Coast. Gold softened slightly as real yields climbed, though the yellow metal remained well-supported above $2,350. Bitcoin traded around $68,000 as institutional flows remained modest ahead of pending ETF decisions. Ether lagged, weighed by regulatory uncertainty around staking products.
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