Dollar eases off slightly
The stronger-than-expected increase in US nonfarm payrolls for June reported last Friday saw US yields tick higher and the US dollar following suit on Friday. The greenback saw mild consolidation in Asia this morning, with the Dollar Index, the measure of the US dollar’s value against six major currencies, easing off to 97.235 from Friday’s 97.286 close, the highest in almost three weeks.
The slight dollar retracement allowed most major currencies to eke out small gains, with AUD/USD climbing 0.06% to 0.6985 while the EUR/USD was at 1.1228, unmoved by the Greek election results which saw an opposition win, which was generally viewed as market friendly. EUR/USD traded below the 55-day moving average at 1.1233 on Friday for the first time since June 19 and the next possible support level could be the June 18 low of 1.1181.
EUR/USD Daily Chart
The Turkish lira fell aggressively after it was announced that the Central Bank governor Cetinkaya had been removed from office at the weekend. No official reason was given for the dismissal and Deputy Governor Murat Uysal will take his place.
USD/TRY jumped the most since March 28 to hit 5.7835, the highest in a week, amid restrictive liquidity in the early hours at the start of the week. The 100-day moving average at 5.7289 has been breached and the 55-day moving average is at 5.8979. The 200-day moving average looks to be providing strong support at 5.5873 as it has remained intact on a closing basis since March 27.
USD/TRY Daily Chart
Equities extend slide
Equity indices continued the downward path seen on Wall Street last Friday, with US indices sliding between 0.2% and 0.29%. China shares under-performed, notching up at 1.56% decline, which extended the current bear run to a fifth day as the index touched the lowest in eight days.
A more cautious approach to sentiment may have been adopted after Iran announced that it was scaling back its commitment to the 2015 nuclear deal with world powers, and will continue to do so every 60 days, unless signatories to the pact worked to remove it from the US sanctions.
Is a July Fed cut still on?
Despite the strong US jobs data and the uptick in US yields, with the 10-year US Treasury yield back above 2%, market pricing for the July Fed meeting still suggest a 96.5% probability of a 25bps rate cut. Before the meeting on the 31st, we may get more clues and insight on current Fed thinking when Chairman Powell delivers his semi-annual testimony on Wednesday and Thursday.
Following his Thursday testimony, Fedspeakers will be out in force, with speeches scheduled from Bostic (dove, non-voter), Barkin (hawk, non-voter) and Kashkari (dove, non-voter), so we could get some interesting perspectives.
German production to slow further?
The weak German factory orders for May reported on Friday could negatively impact the industrial production data due today. Latest surveys suggest an improvement to -0.4% m/m from -1.9% in April, but the factory orders numbers could imply the downside is vulnerable. We also get to see German trade data for May and Euro-zone Sentix investor confidence for July. There are no major US data releases scheduled for today.
The full MarketPulse data calendar can be viewed at https://www.marketpulse.com/economic-events/ 
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