DXY at 100.66 as trade deficit looms and RBNZ's rate call goes to the wire

DXY enters Tuesday's session at 100.66. The index remains caught between two countervailing forces: the June nonfarm payrolls miss — 57,000 jobs against a consensus near 110,000, released July 2 — continues to cap the dollar's recovery, while safe-haven demand tied to Strait of Hormuz geopolitical tensions sustains an underlying bid. The June US ISM Non-Manufacturing PMI printed at 54.0, exactly matching estimates; the S&P Global composite for June came in at 51.9, just below the 52.2 preliminary. Neither reading broke the dollar's stalemate. Wednesday's FOMC minutes from the June 16-17 meeting are the week's principal catalyst for the dollar.

The prior session left the Treasury curve largely unmoved. The 5-year fell 1.4 basis points to 4.216%; the 10-year slipped 0.2 basis points to 4.483%; the 30-year edged up 1.4 basis points to 4.999%; the 3-month bill added 2.2 basis points to 3.690%. In a July 6 speech on monetary policy, Fed's Waller said he continues to believe "forward guidance can be a valuable tool that has, at times, significantly strengthened policymaking and will continue to be useful." FOMC Member Bowman's appearance today could not be confirmed this run (unverified). The more consequential event for rates is Wednesday's release of FOMC minutes from Chair Warsh's June 16-17 meeting.

EUR/USD: 1.1436, capped below the 20-day EMA near 1.1460 as Hormuz-driven safe-haven flows offset the June NFP miss's soft-dollar pull. GBP/USD: 1.3382, holding recent gains on dollar weakness; the BoE held Bank Rate at 3.75% by a 7-2 vote at its June meeting, with two members favouring a hike to 4.00%. USD/JPY: 162.17, recovering in Monday's session as the yen gave back part of its July 2 gains; the roughly 250bp-plus Fed-BoJ rate differential anchors the pair at elevated levels. USD/CAD: 1.4215, described in the prior session as tilting the bias back to the upside after a break above the 100- and 200-period moving averages; WTI at $68.52 remains a headwind for CAD.

EUR/USD at 1.1436 sits just below the 20-day EMA near 1.1460 that has capped the pair since Monday's session. The desk reads sentiment as neutral: the June NFP miss — 57,000 against roughly 110,000 expected — provides a partial floor, but Strait of Hormuz tensions continue to sustain safe-haven dollar demand on the other side. On the ECB side, the bank raised its deposit facility rate 25 basis points to 2.25% on June 11. Since then, the euro area flash HICP for June printed at 2.8%, below the ECB's own 2026 projection of 3.0%, tempering expectations for the July 23 meeting. ECB's Schnabel noted that the "Current price shock cannot simply be looked through," while Wunsch observed limited second-round effects from the Iran situation. Today's German industrial production (forecast +0.1%) is a light data point; the heavier catalysts arrive Wednesday with FOMC minutes and Thursday with ECB Monetary Policy Meeting Accounts.

The headline event is the RBNZ rate decision — a genuine toss-up between a 25 basis point hike to 2.50% and a hold at 2.25% (ANZ, BNZ and UBS lean toward a hike; ASB, Westpac and Kiwibank lean toward a hold), followed by the RBNZ press conference. The European session brings German industrial production (m/m, forecast +0.1%), Halifax HPI (m/m, forecast +0.1%), and the French trade balance (forecast -5.9B). The BoE publishes its Financial Stability Report alongside FPC Meeting Minutes and an FPC Statement; BoE Governor Bailey speaks after. On the US side: FOMC Member Bowman's appearance is unconfirmed this run; the US trade balance is forecast to widen to -$78.3B from -$55.9B previously; Canada's trade balance carries a 2.8B forecast; the Ivey PMI consensus is 59.1 (prior 58.2); RCM/TIPP Economic Optimism is forecast at 45.0 against a prior 42.5.