North American FX Open - Usd hands back Trump failed shooting inspired gains

Politics remains front and center for markets, after the weekend's extraordinary failed attempt to assassinate former President Trump at a rally in Butler, Pennsylvania. The incident has led to an increase in Trump's re-election chances, with the defiant Republican's odds of returning to the White House having increased to 67% vs 61% before, according to betting site PredictIt.

Bbg reported that Donald Trump arrived in Milwaukee for the Republican National Convention and told the Washington Examiner he has rewritten his speech to focus on unity. Meanwhile current President Joe Biden urged Americans to cool down the political rhetoric in a high-stakes election.

The Usd gapped higher in initial Asian trade, as did US yields, but the US unit has gradually lost ground over the course of the overnight session, with the DXY actually hitting its lowest level since June 7th.

Chinese Q2 GDP missed expectations, coming in at 4.7% y/y vs the 5.1% consensus and the 5.3% result in Q1. It was the softest showing in in five quarters, adding pressure on the admin to boost confidence, as Beijing leaders start a twice a decade Third Plenum policy meeting today.

JPMorgan lowered their Chinese 2024 growth estimate to 4.7% from 5.2%, while Goldman Sachs shaved 0.1% from their previous 5% forecast.

In the UK, Rightmove announced house prices fell -0.4% m/m vs 0.0% last, as home sellers cut asking prices for the first time in 2024 amid declining market confidence over uncertainty around the election and stubbornly high mortgage rates.

The BoE's arch dove Dhingra speaking to Bbg over the weekend said that rates are ready to come down now. She argued that demand is too soft for inflation to rise sharply and now is the time to start normalizing interest rates, "so we can finally stop squeezing living standards". Dhingra added that the direction of various indicators has been very promising and played down concerns about wage growth and services inflation.

After calling on her colleagues at the MPC to begin cutting rates, Dhingra declared that there is merit in changing interest rates gradually for the reason that it gives people certainty over where things are going and it also lets the MPC to calibrate according to what the developments are, how the economy's reacting.

Despite the dovish talk, Cable made another run higher, but stopped short at 1.2990 again, as it did on Friday.

EZ IP came in at minus 0.6% in May vs the minus 0.7% forecast and down 2.9% y/y on a WDA basis.

Today's US data is our first look at manufacturing in July, with the Empire reading.

North of the border we receive the latest manufacturing and wholesale sales data, as well as the all important BoC Q2 Business Outlook survey. The latter is seen, with tomorrow's Canadian CPI print, as a key report in influencing whether the BoC will cut rates again next week

Fed Chair Powell is set to be interviewed at the Economic Club of Washington DC and Daly speaks on the economy, tech.

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