Dollar and Sovereign Debt Yields Up – Currency Thoughts
Dollar and Sovereign Debt Yields Up
July 17, 2025
Broadly based dollar rises overnight followed Trump’s denial that he plans to fire Powell and a Beige Book signaling modest to moderate growth in most Federal Reserve districts. There was some relief, too, that yesterday’s producer price report was less alarming the the consumer price data released Tuesday. Several more U.S. data reports are on tap today, including retail sales, import prices, the Philly Fed manufacturing survey, the NAHB housing index, Treasury-compiled capital flows, and weekly jobless insurance claims.
Trump’s comments on Powell were hardly complimentary, claiming the Fed Chairman to be doing a “lousy job” and confirming he will be appointing a good replacement to take over in 8 months. Actually the remaining time of Powell’s current term is a little longer than Trump suggested as it runs to May 15, 2026. Meantime, Trump racked up more wins in the courts and congress, where the senate approve the take-back of funds previously allotted for foreign aid and public broadcasting.
Dollar gains since the Wednesday close in NY amount to 0.9% against the Australian dollar, 0.6% relative to the Japanese yen, 0.4% versus the euro, loonie, Swiss franc, peso and kiwi, and 0.2% vis-a-vis sterling, the won and Turkish lira.
Bitcoin edged down 0.3% amid suspense over whether the crypto bill will be passed.
The ten-year U.S. Treasury yield rose two basis points overnight as did comparable 10-year sovereign debt yields in France, Italy, Spain and the U.K.. The 10-year German bund yield ticked a basis point higher, while the 10-year Japanese JGB is 2 bps lower.
Stock markets closed up 1.3% in Indonesia, 1.1% in New Zealand, 0.9% in Australia, 0.8% in Taiwan, 0.6% in Japan and 0.4% in China. The German Dax and Paris CAC so far show 0.9% advances, while equities are 0.5% firmer in the U.K., Spain and Italy so far. But U.S. stock futures show little net movement, and gold is down 0.7%.
Australian labor market statistics for June were disappointing. The jobless rate rose 0.2 percentage points to a 43-month high of 4.3%, and fewer-than-expected net jobs (2k) were created.
Japan reported a smaller-than-forecast unadjusted JPY 153 billion trade surplus in June that translates to a seasonally adjusted deficit of JPY 235 billion versus an average monthly gap of JPY 304 billion during the first five months of this year. Exports and imports each slipped slightly between May and June.
Food price inflation in New Zealand accelerated to an 18-month high of 4.6% in June.
Jobless insurance claims in the U.K. jumped by 26k last month, and the latest 3-month average unemployment rate of 4.7% posted a third straight uptick. On a brighter note, average wage earnings growth slowed to 5.0%, an 8-month low overall and a 35-month low when excluding bonuses.
Russian producer prices slumped 1.3% on month in June and posted the smallest 12-month increase (just 0.1%) in two years.
Euroland consumer price inflation in June was left unrevised at a 2-month high of 2.0%. Core inflation excluding food and energy matched May’s 40-month low of 2.3%. A tenth of a percentage point was shaved off the on-year drop in energy prices, no estimated at -2.6%. Service sector price inflation of 3.3% was up from 3.2% in the prior month. Estonia, Portugal, Romania and the Czech Republic experienced noticeable inflation upticks.
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: British and Australian labor statistics, Euroland CPI, Japanese trade balance
ShareThisYou can leave a response, or trackback from your own site.
