European FX Open - A packed US slate ahead of Independence Day

Not much change after, but Fed chair Powell remarked yesterday that latest US economic data suggest inflation is getting back on a downward path, but emphasised officials need more evidence before lowering interest rates.

AUD/USD is among those little moved despite the overnight Australia retail sales beat in May at 0.6% m/m vs the 0.3% consensus and 0.1% the month previous though spending was largely driven by discounts albeit amid elevated borrowing costs.

Will the big Dollar be a bigger mover later through the big US data diary (ahead of tomorrow's Independence Day holiday). We get pre NFPs ADP employment change (158k in June) and initial claims, trade, factory orders and durable goods as well as the ISM services index. The latter is expected at 52.5 vs 53.8 the month previous, which was a best since August 2023. The employment component is seen as a drag, indicating further a loosening labour market.

To help continue the US focus, tonight sees the release of Wednesday's FOMC Minutes from the June 12 verdict day will be main focus. That day, via the Dots, main takeaway was the Fed overall is expecting just one rate cut in 2024.

Ahead, through the morning, we get the services and composite PMIs out of Europe as well as the likes of EMU PPI for May.

Also overnight, China's Caixin versions of services and composite PMIs slowed materially in June a 51.2 and 52.8 respectively. The former was a slowest pace in eight months, a slowdown that may bring fresh worries over the economy s outlook.

In other markets, oil backs off from Tuesday's Usd 87.46/brl mini range highs after the API reported crude inventories declined 9.2mln barrels last week, a largest drop in barrels since January; the US 10-year yield holds 4.40%-plus post-Powell and all US stock futures are all small in the red.

Elsewhere, focus is on politics. Bbg reports Marine Le Pen s National Rally is trying to outmaneuver rivals that are pulling out well-worn tricks to keep the far-right out of power in the final round of legislative elections on Sunday; US President Joe Biden blamed extensive travel in the weeks ahead of his disastrous debate against Donald Trump for his much criticised performance and former UK PM Boris Johnson made an unexpected campaign appearance to urge Conservative voters to deny Labour a landslide victory at the general election.

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