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  • FX volumes appear to be in line with the past few sessions, but EURUSD is again only fifth in the gross volume ranking, which is rather unusual and likely reflective of the range bound trading and that neither the Fed or ECB is materially budging on their loose policy stance yet.

  • There was a big beat for the New Zealand CPI earlier today, and there is now a 90% chance of a rate hike being priced for August. NZD is being held back against the funders by a weak risk tone, but dropped to 1.0579 vs AUD, which is interesting given that's where the bulk of the spec positioning is - partly to avoid difficult decisions on USD and partly with sentiment shifting negative due to lockdowns and a relatively slow pace of vaccination in Australia.

  • The first half of the week focused on US CPI after another substantial jump in used cars prices led the sharp increase in the June headline (0.90% vs. 0.51%, UBS 0.66%) and USD demand across the board followed. NZD has been in focus this week as a strong CPI beat (3.3% year-on-year, a 10-year high) reinforced expectations for an August hike (currently 75% priced) following a hawkish RBNZ. The BoC failed to deliver on hawkish expectations but did confirm QE would slow to 2bIn CAD from 3bIn a week.



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