Markets look towards FOMC minutes midweek as traders return from long weekend

The markets remain subdued this morning following the 4th July Independence Day holiday in the US on Friday. Trader discussion this morning seems to be focused around the tennis epic witnessed at Wimbledon yesterday and the risk positive steps taken by incoming Manchester United manager, Louis Van Gaal, as he replaced a small goal keeper for a Dutch penalty shootout.

Overnight the BoJ Governor, Kuroda, stressed that the Japanese economy is recovering as he maintained that the BoJ will continue with stimulus measures for as long as needed to achieve their inflation target of 2%.

The FX market feels like it wants the dollar to test higher levels following the robust US jobs data last Thursday. This is despite CFTC data showing that GBP longs increased further to above $6bn last week.

Dollar strength is not replicated in other asset classes as we note that the slight increase in US Treasury yields occurred prior to the US jobs data. Post reaction was extremely disappointing for dollar bulls, despite US investment bank, Goldman Sachs, revising its first Federal Reserve rate hike from Q3 2016 to Q3 2015.

There are no data releases today of any substance as the market is likely to focus on the FOMC minutes released on Wednesday and we hear from Federal Reserve members Lacker, George and Plosser.

The BoE meeting on Thursday is likely to be a non-event as the data focuses are likely to be centred around the latest CPI readings from Europe, industrial and manufacturing production data from the UK and employment reports from Canada and Australia.

EUR/USD

Supports 1.3560-1.3530-1.3505 | Resistance 1.3630-1.3680-1.3700

USD/JPY

Supports 101.90-101.25-100.75 | Resistance 102.30-102.85-103.05

GBP/USD

Supports 1.7130-1.7100-1.7060 | Resistance 1.7185-1.7200-1.7285