Morning Commentary: Zzzz…

A daily summary and commentary of events and factors that affect the global markets, with a particular emphasis on the foreign exchange markets.

Zzzz…  Share this story: Alan Rose Foreign Exchange Senior Trader

On Monday, we wrote about uncertainty causing short term market paralysis in many asset classes despite all the optimism in U.S. and global equities as they remain at or near all-time highs. Uncertainty surrounding the future course of the U.S. economy, Fed policy, and the continued stalemate between U.S. and China over trade have investors and traders largely watching from the sidelines in the short term. Markets (including equities now) have reached an equilibrium point of balancing both positive and negative aspects of the future. It will take some new initiative or development to shift the market dynamics once again.   As we arrive today, the near term theme of consolidation and range trading continues to dominate almost all asset classes this week. Equities, G7 interest rates, commodity prices, and in particular, foreign exchange have all been characterized by narrow ranges and low volumes. The euro and Japanese yen once again both traded in an incredibly narrow range of just 22 bps. Although economic data from overnight provided a brief spark of life, the market has succumbed to apathy and boredom.   Many of the commentaries I read are stressing neutrality at this time regarding any position-taking. The next two potentially market moving events are the ECB policy meeting next week and the Fed meeting on July 31. Until there is a change in market perceptions or dynamics, continue to expect more of the same in the short term. HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT: U.S. Housing Starts for June came in slightly weaker than forecast and declined for the second month in a row as a drop in multifamily starts, which includes apartment buildings and condominiums, outweighed a pickup in single family starts. Housing permits, a proxy for future construction, dropped by 6.1%. U.S. interest rates are nearly unchanged. Canadian CPI for June fell by 0.2% which was slightly better than expectations of a decline of 0.3%. May CPI rose by 0.4%. CPI YoY fell from 2.4% to 2.0%, and Canadian interest rates are fractionally lower while the Canadian dollar is stronger.

If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133. Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos!

Follow City National Bank on social media:

Non-deposit investment products: • Are not FDIC insured, • Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and • Are subject to investment risks, including possible loss of the principal invested. This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting.

Unsubscribe from this list  |  Update email preferences This message has been sent to bank@banking.offers.report. Please do not reply to this email. To ensure the delivery of future emails, please add foreignexchange@emails.cnb.com to your email address book or safe sender list. Copyright ©2019 City National Bank – All Rights Reserved. 350 South Grand Avenue, 12th Floor, Los Angeles, CA 90071 City National Bank is a subsidiary of Royal Bank of Canada. TERMS & CONDITIONS  |  PRIVACY STATEMENT NMLSR ID# 536994 | City National Bank Member FDIC