US Dollar turns soft ahead of crammed economic calendar

NEW YORK (July 3) The US Dollar (USD) eases on Wednesday after surprise comments from US Federal Reserve Bank of Chicago President Austan Goolsbee in Sintra during the European Central Bank symposium. Goolsbee said that keeping rates steady while inflation is coming down should also be considered as tightening and is no longer needed, suggesting interest rate cuts on the table. Ahead of the Fed’s Federal Open Market Committee (FOMC) Minutes, a bold statement to make. 

On the US economic front, the calendar is very crowded on Wednesday, with many data points being moved from Thursday due to the US public holiday. The main key element will be the ADP Employment Change number for June ahead of the US Nonfarm Payrolls print on Friday. Additionally, the FOMC Minutes for the June meeting will be released at the end of the day, and some volatility looks to be guaranteed. 

Daily digest market movers: Goolsbee breaks ranks

• At 11:30 GMT, the Challenger Job Cuts for June will be released. The previous number was at 63,816. 
• The June ADP Employment Change data will be released at 12:15 GMT. An increase of  160,000 is expected after the 152,000 seen in May.
• Weekly Jobless Claims are to come in at 12:30 GMT, exceptionally on Wednesday:
  • Initial Jobless Claims for the week ending June 28 are expected to rise to 235,000 from 233,000 a week before.
  • Continuing Jobless Claims were at 1.839 million, with no consensus number available for the week ending June 21. 
• At 14:00 GMT, the Institute for Supply Management will release June’s Purchasing Managers Index (PMI) reading for the Services sector:
  • The Employment Index was at 47.1 in May, with no forecast available for June.
  • The New Orders Index was at 54.1 in May, with no forecast available for June.
  • The ISM Services PMI is expected to ease to 52.5 in June from 53.8.
  • The Prices Paid Index was at 58.1 in May, with no forecast available for June.
• On the Federal Reserve front, some communication on the  docket:
  • At 10:30 GMT, comments from the Federal Reserve Bank of New York President John Williams, who participates in a panel about drivers of equilibrium interest rates at the ECB Forum on central banking in Sintra, Portugal.
  • At 18:00 GMT, the FOMC Minutes for the Federal Reserve’s June meeting will be released. 
• European equities are flirting with a 1% increase on the day. US Futures are still looking for direction. 
• The CME Fedwatch Tool is broadly backing a rate cut in September despite recent comments from Fed officials. The odds now stand at 59.9% for a 25-basis-point cut. A rate pause stands at a 34.7% chance, while a 50-basis-point rate cut has a slim 5.4% possibility. 
• The US 10-year benchmark rate trades near 4.44%, near this week’s high.

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