The GBP is the strongest and the CHF is the weakest as the North American session begins. The UK CPI came in at 6.8% a bit higher than the forecast of 6.7% (although down from 7.9% last month) and has the pound moving more to the upside. The USD is mixed with modest gains vs the JPY, CHF and declines versus the GBP and NZD. The EURUSD, USDCAD and AUDUSD are little changed.

China has pledged to achieve its annual economic goals by enhancing consumption and investment, as stated by Premier Li Qiang on state radio CNR. Emphasizing the importance of amplifying domestic demand, he highlighted the need to boost bulk consumption. Additionally, the cabinet has committed to intensifying efforts to attract and utilize foreign investment. Asian-Pacific stocks were sharply lower on the back of concerns about China as well as the sharp declines in the US market yesterday.

Mortgage data in the US today showed continued weakness as the 30 year mortgage rate settles above 7%

• US Mortgage Refinance Index 408.4, Previous 416.1
• US MBA Purchase Index 149.5, Previous 149.9
• US Mortgage Market Index193.0, Previous 194.5
• US MBA Mortgage Applications -0.8%, Previous -3.1%
• US MBA 30-Yr Mortgage Rate 7.16%, Previous 7.09%

In the European session the dump of data showed UK CPI higher than expectations. The EU data was mostly better:

• CPI y/y: Actual: 6.8% vs forecast: 6.7%. Previous: 7.9%

• Core CPI y/y: Actual: 6.9% vs. forecast: 6.8%. Previous: 6.9%

• PPI Input m/m: Actual: -0.4% vs. forecast: -0.1%. Previous: -1.3%

• PPI Output m/m: Actual: 0.1% vs. forecast: -0.2%. Previous: -0.2%

In Europe:

• EU Employment Flash YY Q2: 1.5% vs. Estimate 1.4%, Previous 1.6%
• EU Industrial Production YY Jun 2023: -1.2% vs. Estimate -4.2%, Previous -2.2%
• EU Industrial Production MM Jun 2023: 0.5% vs. Estimate -0.1%, Previous 0.2%, Revised 0.0%
• EU GDP Flash Estimate YY Q2 2023: 0.6% vs. Estimate 0.6%, Previous 0.6%
• EU GDP Flash Estimate QQ Q2 2023: 0.3% vs. Estimate 0.3%, Previous 0.3%

A snapshot of the markets as the NA session gets underway shows:

• Crude oil is trading unchanged at $80.99. The low price reached $80.52. The high price reached $81.26. After the close, the private inventory data showed a crude oil drawdown of -6.195 million barrels. The EIA data is expected to show a -2.32M drawdown today at 10:30 AM ET. Gasoline inventories rose by 0.700M (estimate today is for a drawdown of -1.260M
• Spot gold is trading up $3 or 0.16% at $1904.64
• Spot silver is trading up $0.18 or 0.81% at $22.67
• Bitcoin is trading at $29,127. At this time yesterday the price was at $29,324.

In the US premarket for US stocks, major indices are little changed, after the sharp falls of over 1% in the major indices yesterday. The decline yesterday were led by the banks after Fitch told CNBC that they were looking to lower the ratings of major banks including J.P. Morgan (down -2.55% yesterday) and Bank of America (down -3.20% respectively yesterday). The KBE ETF fell -3.10% yesterday while the KRE index fell -3.33%.

The key earnings this morning showed:

TJX Companies Inc (TJX) Q2 2023 (USD): BEAT

• EPS: 0.86 vs expected 0.77
• Revenue: 12.8 billion vs. expected 12.45 billion
• Raises FY24 outlook for overall comp store sales, pretax profit margin, and Adj. EPS
• Stock price pre-market: Up $2.23 or 2.6%

Target Corp (TGT) Q2 2023 (USD): MISS

• Adjusted EPS: 1.80 vs. expected 1.39
• Revenue: 24.77 billion vs expected 25.16 billion
• Stock price pre-market: Up $9.62 or 7.67%

JD.Com Inc (JD) Q2 2023 (USD): BEAT

• Adjusted EPS: 0.74 vs. expected 0.66
• Revenue: 39.7 billion vs. expected 38.53 billion
• Stock price pre-market: Down $1.86 or -5.17%

The snapshot of the major indices shows:

• Dow Industrial Average is trading up 4.61 points after falling -361.24 points yesterday
• S&P index is trading unchanged after yesterday’s -51.86 point decline
• NASDAQ index is trading up 6 points after yesterday’s -157.28 point fall

In the European equity markets, the major indices are trading mixed

• German DAX, up 0.24%
• France’s CAC, up 0.13%
• UK’s FTSE 100, down -0.33%
• Spain’s Ibex, up 0.28%
• Italy’s FTSE MIB, down -0.50% (delayed)

In the Asian Pacific today, equity markets closed sharply lower.

• Japan’s Nikkei 225, down -1.46%
• China’s Shanghai Composite, down -0.82%
• Hong Kong’s Hang Seng, down -1.36%
• Australia’s S&P/ASX 200, down -1.50%

In the US debt market, yields are mixed. The shorter and today is higher while the longer and is modestly lower

• 2-year yield, 4.931% -2.5 basis points
• 5-year yield, 4.340% -3.7 basis points
• 10-year yield, 4.193% -2.8 basis points
• 30-year yield, 4.310% -0.8 basis points

In the European debt market, benchmark 10-year yields are mostly lower:

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