The focus today will be on the data from the US with the Retail Sales data for June released along with Industrial Production. Retail Sales are expected to have picked up modestly with autos helping lift consumer spending. But the outlook ahead we believe remains challenging with excess savings held by households close to being depleted while fiscal support measures have been removed and later this year consumers with student debt will restart servicing those debts.

The data today is very unlikely to have much bearing on expectations for next week when the FOMC will likely hike by 25 bps. However, the Fed Funds Futures strip currently has 140 bps of rate cuts priced for 2024 and this will continue to weigh on US Dollar performance.