Year's 3rd Biggest Daily Gain

Today maybe a sleepy end-of-month and end-of-quarter day with traders enjoying the sun/beach as the World Cup takes its day off, but EURUSD posted its 3^rd biggest daily percentage gain of the year. Sceptics will say the move is insignificant due to end-of-quarter-rebalancing but there is more to USD move than seasonals. The 1^st estimate for Eurozone June CPI hit the ECB's 2.0% target, but even as the core CPI slipped to 1.1%, higher energy prices and cheap euro will make an ECB rate hike before next summer inevitable, something that I mentioned on the day of the ECB 2 weeks ago here, but finally stated today by FX journalists following the figures. The Fed's preferred inflation target hit 2.0%, but the US central bank has repeatedly spoken of a symmetric approach to inflation.

The July 4^th holiday will coincide with world cup quarter finals, but soon after the US June jobs report will be released, alongside its Canadian counterpart. Meanwhile, odds of a Bank of Canada rate hike next month have spiked to 87% (from 53% earlier in the week) after persistent oil rally and Poloz's insistence that the central bank is indeed feeling less "cautous" despite Trump's ongoing threats at NAFTA.