Kickstart the North American session: The USD is little changed versus the major currencies.
The above video kickstarts the North American session with a technical look at the 3 major currency pairs – the EURUSD, USDJPY and GBPUSD. All three are within 0.13% of unchanged in confined trading as the market awaits the next shove. Perhaps it is as the market traders await the England vs Argentina footie match later today. Congrats to Spain on their win yesterday vs France securing their place in the finals on Sunday.
Back to the market, a number of major U.S. financial companies reported stronger-than-expected second-quarter results overnight, continuing the positive tone from the start of earnings season. Results were broadly driven by resilient capital markets activity, solid fee income, and better-than-expected profitability, with every major company below exceeding both earnings and revenue expectations.
- Morgan Stanley (MS): EPS $3.46 vs. $2.93 est. (BEAT), Revenue $21.31B vs. $19.65B est. (BEAT)
- Bank of New York Mellon (BK): Adj. EPS $2.46 vs. $2.23 est. (BEAT), Revenue $5.70B vs. $5.40B est. (BEAT)
- Johnson & Johnson (JNJ): Adj. EPS $2.90 vs. $2.86 est. (BEAT), Revenue $25.30B vs. $25.02B est. (BEAT); raised FY2026 outlook
- BlackRock (BLK): Adj. EPS $13.91 vs. $12.61 est. (BEAT), Revenue $7.08B vs. $6.73B est. (BEAT)
- ASML: EPS €7.59 vs. €6.97 est. (BEAT), Revenue €9.33B vs. €8.80B est. (BEAT), Net Income €2.92B vs. €2.62B est. (BEAT), Gross Margin 54% vs. 52% est. (BEAT); guided Q3 revenue of €8.4B–€9.0B
- Richemont: Revenue €6.33B vs. €5.81B est. (BEAT), Constant-currency sales +20% vs. +11.2% est. (BEAT)
ECB policymakers maintained a generally hawkish tone overnight, emphasizing that inflation risks remain elevated despite recent progress. Executive Board member Fabio Panetta said eurozone inflation is currently running near 3% and is expected to remain above that level into early 2027. He warned that higher energy prices, tighter financial conditions, and ongoing geopolitical tensions—particularly in the Middle East—could keep inflation pressures alive and tighten credit conditions. His comments suggest the ECB remains focused on ensuring inflation expectations stay anchored and preventing second-round effects.
ECB Governing Council member Joachim Nagel also struck a hawkish note, saying policymakers should continue to react cautiously but be prepared to act decisively if necessary. He reiterated that monetary policy should remain vigilant given the uncertain geopolitical backdrop and inflation outlook.
ECB Governing Council member Klaas Knot (reported as Kochev/Kochev in the news feed) echoed a slightly hawkish to neutral stance, saying the ECB stands ready to adjust policy at any time if needed and remains committed to returning inflation to its 2% target. However, he noted that no significant second-round inflation effects are currently evident, suggesting there is no immediate urgency to tighten policy further.
Overall, the ECB messaging overnight leaned hawkish, with policymakers continuing to stress upside inflation risks and the need to keep policy restrictive until they are confident inflation is durably returning to target.
The US stock futures are implying a marginally higher opening for the major indices with the Dow up 45 points, the S&P up 2.66 points and the Nasdaq up 120 points.
Looking at the US debt market, yields are higher with teh 2 year at 4.214% up 2.1 basis point. The 10 year is up 2.6 basis points at 4.611%.
On the economic calendar, the North American session features the sister US inflation reading with the PPI data in the US. In addition, there will be, some Canada sales data and at later the Bank of Canada rate decision. The main focus will be the U.S. Producer Price Index (PPI) at 8:30 AM ET, which provides an important read on pipeline inflation following yesterday’s softer-than-expected CPI report. The Bank of Canada announces its latest interest rate decision at 9:45 AM with no change expected. At 10 AM, the Fed Chair will take his testimony to the Senate in front of the Banking Committee.
- 8:30 AM ET – U.S. NY Fed Manufacturing Index (July): Forecast 8.80 vs. prior 5.70
- 8:30 AM ET – U.S. PPI Final Demand YoY (June): Forecast 6.2% vs. prior 6.5%
- 8:30 AM ET – U.S. PPI Final Demand MoM (June): Forecast 0.0% vs. prior 1.1%
- 8:30 AM ET – U.S. Core PPI ex-Food & Energy YoY (June): Forecast 5.2% vs. prior 4.9%
- 8:30 AM ET – U.S. Core PPI ex-Food & Energy MoM (June): Forecast 0.4% vs. prior 0.4%
- 8:30 AM ET – U.S. PPI ex-Food, Energy & Trade YoY (June): Prior 5.1% (no consensus estimate)
- 8:30 AM ET – U.S. PPI ex-Food, Energy & Trade MoM (June): Prior 0.8% (no consensus estimate)
- 8:30 AM ET – Canada Manufacturing Sales (May): Forecast 1.1% vs. prior 4.2%
- 8:30 AM ET – Canada Wholesale Trade (May): Forecast -0.7% vs. prior 0.6%
- 9:45 AM ET – Bank of Canada Rate Decision: Expected to hold the overnight rate at 2.25%.
This article was written by Greg Michalowski at investinglive.com.