Outside Of USD/JPY, USD Firmer

Outside of the yen, the USD has been supported against the majors, although ranges have been tight.

• Yen demand was evident early in the session against both the USD and on crosses. USD/JPY dipped below the overnight low, before finding a base between 135.10/15. We last sat at 135.40 and may have seen a sharper pull back in USD/JPY if not for a modest recovery in US yields (2yr up 2bps to 2.84%).
• EUR/JPY dipped just below 138.70, through overnight lows and the 50-Day MA, which comes in at 139.01. The pair last traded at 138.85. EUR/USD has drifted towards 1.0250 this afternoon.
• AUD and NZD have struggled to gain much upside traction, although more so NZD. AUD/USD has oscillated around 0.6800. Weaker commodity prices have curbed any upside impetus. Iron ore is back to a $107/tonne handle. Lockdown concerns in China has weighed on the outlook, with large parts of Shanghai undergoing mass testing as case numbers track higher.
• Copper is also down, off a further -1%, while oil gains have slipped as the session has progressed. Brent back sub $104/bbl, from earlier highs of close to $106/bbl.
• CAD and NOK are back weaker against the USD, although only modestly.
• GBP/USD got above 1.1970 in early trade, but is now back to 1.1950. Local politics is likely to be watched closely when the London session kicks off.
• Looking ahead, German factor orders are on tap, along with the construction PMI. The UK construction PMI is also due. Retail sales for Euro Area also print.
• In the US, the docket will be headlined by services ISM data and the release of the minutes from the most recent FOMC decision. We will also get weekly MBA mortgage apps, final services PMI data and the latest JOLTS job opening print. The release of the FOMC minutes from the June meeting will be bolstered by Fedspeak from NY Fed President Williams.