Macro Wrap

The US Senate approved President Trump’s tax-and-spending bill, by the narrowest of margins sending it back to the House. Bill focusses on advancing a package that would slash taxes, reduce social safety net programs and boost military and immigration enforcement spending while adding $3.3 trillion to the national debt. Negative for USD

The Dow Jones Industrial Average rose 400.17 points, or 0.91%, to 44,494.94, the S&P 500 fell 6.94 points, or 0.11%, to 6,198.01 and the Nasdaq Composite fell 166.84 points, or 0.82%, to 20,202.89. U.S. 10-year notes up 2.3 basis points to 4.25%. DXY eased to 96.74, putting it on pace for a ninth straight session of declines. WTI settled up 0.52% to $65.45 a barrel and Brent settled at $67.11 per barrel, up 0.55% on the day.

The US ISM manufacturing index remained in contraction territory for the fourth consecutive month but still registered some improvement to 49.0 in Jun (versus Bloomberg est 48.8 and up from 48.5 in May). The employment index weakened to 45 from 46.8 of May and Prices paid rose to 69.7 indicating gradual inflationary pressure. While US construction spending contracted more than expected, by -0.3% m/m in May (versus Bloomberg est -0.2% m/m) but the decline in Apr was revised smaller to -0.2% (from -0.4%). US total vehicles sales eased to 15.34 million units in Jun from 15.65 million in May but was slightly above Bloomberg est of 15.3 million). Overall negative for USD.

The Eurozone prelim Jun CPI came in line with market expectations, rising by 0.3% m/m, 2.0% y/y (exactly with Bloomberg median estimates), slightly up from 0.0% m/m, 1.9% y/y in May. Core CPI rose by 2.3% y/y same as May, also in line with market expectations. Sentimentally positive for Euro.

Economic data watch: we will have the ADP employment change data for Jun (Bloomberg est 95k from 37k in May) and Challenger job cuts data for June.