Markets braced for the upcoming release of the FOMC meeting minutes, which then appeared to spur a risk-on and anti-USD reaction.
Meanwhile, bitcoin surged close to its all-time highs while dollar weakness ensued while WTI crude oil held its ground above $68 per barrel.
Here are headlines you may have missed in the last trading sessions!
Headlines:
- API crude oil inventories showed surprise increase of 7.1M barrels vs. expected 2.1M draw
- RBA Deputy Governor Hauser warned that there is an enormous amount of uncertainty in the global economy
- China Consumer Price Index Growth Rate for June 2025: 0.1% y/y (0.1% y/y forecast; -0.1% y/y previous); -0.1% m/m (0.0% m/m forecast; -0.2% m/m previous)
- China Producer Price Index Growth Rate for June 2025: -3.6% y/y (-3.0% y/y forecast; -3.3% y/y previous)
- RBNZ kept interest rates on hold at 3.25% as expected, reiterated gradual and cautious pace of easing ahead
- Japan Machine Tool Orders for June 2025: -0.5% y/y (3.5% y/y forecast; 3.4% y/y previous)
- BOE Governor Bailey assured that recent steepening of yield curve has less to do with U.K. economy but that they will look into it during annual quantitative tightening decision
- ECB official Lane: Shifts in international and domestic regimes are also relevant to inflation dynamics, policy needs to ensure that external shocks don’t lead to deviations of inflation from target
- ECB official de Guindos expressed hopes for exchange rate stabilization that doesn’t have additional negative impact
- German Chancellor Merz remained cautiously optimistic that EU can strike trade deal with US
- EU reportedly closing in on a “framework of an agreement” with the US, aiming to reach a deal before August 1
- ECB official Nagel said that the central bank should neither plan nor rule out further rate cuts
- U.S. Wholesale Inventories for May 2025: -0.3% m/m (-0.3% m/m forecast; 0.2% m/m previous)
- U.S. EIA Crude Oil Stocks Change for July 4, 2025: 7.07M (3.85M previous)
- June FOMC meeting minutes highlighted division among policymakers on scale and timing of future easing, a couple of members favored a July cut
- US President Trump imposed 50% tariffs on Brazil
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Markets started the day on a calm note, possibly digesting the previous session’s tariffs-related headlines, with risk assets moving mostly in ranges.
Gold remained on the back foot, extending its steady slump a few hours into the London session before turning higher just before U.S. markets opened. The safe-haven precious metal continued its rebound after the release of the FOMC meeting minutes, as calls for a July rate cut were revealed.
In turn, this translated to another leg lower for U.S. Treasury yields, bringing the 10-year yield down 1.52% for the day, as investors likely adjusted positions to reflect stronger odds of more aggressive Fed easing for the remainder of the year.
Meanwhile, WTI crude oil enjoyed a pop higher as London markets opened to lingering concerns about Red Sea attacks by Houthi militants, keeping geopolitical tensions elevated and global supply jitters in play. The commodity returned its intraday gains before the U.S. session, but the rally resumed even after the EIA report printed a surprise build in inventories while USD weakness came in play.
U.S. equities also had a bullish reaction to revived expectations of more Fed interest rate cuts, with the S&P 500 index up 0.61% and the Nasdaq closing out with a 0.95% gain. Bitcoin staged a much steeper climb to trade close to all-time highs on a combination of risk-taking and a dollar selloff.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
The dollar had a messy run throughout the day, with major currency pairs chopping around leading up to the release of the FOMC meeting minutes.
USD started the day on slightly stronger footing, possibly retaining some of its upside momentum from the earlier trading session, although NZD/USD managed to pop sharply higher during the RBNZ decision. China’s upbeat headline CPI release also led to some gains for AUD/USD, but these were quickly erased as the PPI figure fell short of estimates.
Dollar rallies seemed to hit a peak a few hours before London markets opened, as profit-taking probably took place, before another brief wave higher was seen. From there, USD edged gradually lower during the U.S. session, extending its slump as the FOMC minutes pointed to stronger odds of more aggressive Fed rate cuts down the line.
Upcoming Potential Catalysts on the Economic Calendar
- Germany Consumer Price Index Growth Rate Final at 6:00 am GMT
- Euro area ECB Cipollone Speech at 7:00 am GMT
- U.S. Initial Jobless Claims at 12:30 pm GMT
- U.S. Fed Musalem Speech at 2:00 pm GMT
- U.S. EIA Natural Gas Stocks Change for July 4, 2025 at 2:30 pm GMT
- U.S. Fed Waller Speech at 5:15 pm GMT
- U.K. BOE Breeden Speech at 5:30 pm GMT
- U.S. Fed Daly Speech at 6:30 pm GMT
- U.S. Fed Balance Sheet at 8:30 pm GMT
- New Zealand Business NZ PMI at 10:30 pm GMT
There’s not much on the docket in terms of market-moving economic releases today, but it’s worth noting that a handful of Fed officials (Musalem, Waller, Daly) are scheduled to give testimonies and likely drop hints on their policy outlook.
Better stay on the lookout for USD volatility during these speeches, as well as possible swings in market sentiment from trade-related headlines. As always, stay nimble and don’t forget to check out our Forex Correlation Calculator when taking any trades!
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