Quiet Start to the Trading Week
US markets experienced a quiet day at the start of the week in a shortened trading day ahead of the major Independence Day holiday, but the major indices still managed to creep higher, the Dow closed up 0.03%, the S&P 0.12%, and the Nasdaq climbed 0.21%. Currencies were little changed and continued to trade in familiar ranges and traders noted that the yield curve in the US hit its most inverted level in decades with the 2-year exceeding the 10-year by 110 bps. Oil dropped a bit further with the WTI down 0.7% to once again trading under $70/b despite Saudi Arabia confirming production cuts.
Reserve Bank of Australia in Focus
Markets are split on what happens with the Reserve Bank of Australia’s key interest rate decision today, there is a slight leaning towards a hold after CPI numbers were a lot lower than expected last month but money markets are close to 50/50 on the call. CPI data was lower but other numbers have been resilient including jobs and wages prints and that has helped to make this a real flip of the coin event for traders. Recent hawkish rhetoric from major central banks has many still expecting another hike. The Aussie dollar had a quiet day yesterday but the rate decision due out at 2.30 pm Sydney time is a guaranteed market mover for traders today.
Independence Day Trading, but no Fireworks Expected
It is set to be a relatively quiet day’s trading again for investors today as they look ahead to what is likely to be a moribund US session with markets closed for the Independence Day holiday. APAC markets have a shortened US session to bounce off, so a quiet start is expected, however, the delicately balanced Reserve Bank of Australia rate decision will give plenty of interest with the market split 50/50 between a rate hold or another 25 bps hike. There is little out in the way of tier 1 data today in Europe and many traders are expecting another quiet day ahead of a subdued US trading day.