NY Open – Here we go
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Risk trades well in anticipation of US CPI. Hang Seng posted a strong +2% rally at the close, while European equities are in the green, US equity futures more flat. Modest USD losses, with EMFX the largest beneficiaries. KRW was one of them – we change our BoK house view after a hawkish MPB overnight – cuts are pushed to Oct. GBP gained after a beat in May GDP, whether the MPC cut in Aug hinges on next week’s data. NOKSEK stops were triggered as we broke 0.98 overnight. SEK inflation expectations printed a tad higher. Our economists expect a soft US core CPI at 08:30 EDT at 0.17% MoM which will be enough for a Sep cut (already -18bps cuts priced). Initial jobless claims simultaneously are also important – we warn of upside risks given July 4 holiday. Fed’s Bostic and Musalem views post data at 11:30 and 13:00 EDT will be closely watched, as will Biden’s NATO presser at 17:30. US 30s auction today completes this week’s supply. MXN watches minutes at 11:00 EDT, while BRL awaits retail sales at 08:00. We are out-of-consensus for PEN rate decision after the close, expecting a 25bps cut.
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COP – COP has gained 1.16% this session now trading down at the 3969.92 level. Our trader believes the move is driven by flows as they have seen inflows from CTAs, RMs and HFs. Breaking the dma200 also caused further selling as long USD positions started getting stopped out there. On the data front the Consumer Confidence Index came in at -12.7 vs -15.7 e and -14.1 previously.
