Dollar and U.S. Stock Futures Higher as First Full Week of July Gets Underway
July 6, 2026
(132) The biggest dollar advances so far today are gains of 0.5% against the Japanese yen and New Zealand dollar, followed by a 0.3% rise versus the Swiss franc and South Korean won. The U.S. currency is also 0.1% firmer relative to the euro. In pre-open trading, the U.S. Nasdaq and S&P 500 have strengthened 1.0% and 0.4%. Stock markets are also up in Hong Kong, New Zealand, Indonesia, France, Britain and Germany but closed unchanged in Japan. Ten-year sovereign debt yields have edged 1-2 basis points lower in the United States, Germany, Italy, France and Spain. Bitcoin and gold prices have scored gains of 1.0%.
The price of West Texas Intermediate crude oil is another 0.6% lower. The U.S. and Iran are focused on diplomacy, and the weekend saw a contrast between the lack of military incidents in the Strait of Hormuz and large attacks in the other war between Russia and Ukraine. The NATO summit is scheduled for Tuesday and Wednesday in Ankara, and all eyes will be watching to see what tone President Trump projects there.
This is not likely to be a major week from a data release standpoint. Today’s menu features Euroland retail sales and producer prices and the construction purchasing manager surveys covering the U.K. and euro area.
Retail sales volume in the euro area rose 0.2% month-on-month during May, and the April-May average level was also 0.2% greater than the mean in the first quarter. Sales growth in Germany (+1.1% on month) topped the leader board among the bloc’s four largest economies. Compared to May 2025, sales climbed 1.6%. These result were closely aligned with analyst expectations.
Also as expected, producer prices in Euroland climbed 0.2% in May, far less than the monthly increases of 3.4% in March and 0.7% in April. Nonetheless, the 12-month PPI inflation pace was extended to a 38-month high of 5.9% from 5.0% in April, 2.0% in March and -3.0% in February. Whereas energy prices were 1.0% lower than in April, all other goods categories collectively went up another 0.7%.
The construction purchasing manager indices for June all printed will below the 50 level that represents business conditions that neither improved nor weakened. The British and German readings of 38.2 and 44.8 were each above their May results of 38.2 and 42.4, while the readings in France (38.2), Euroland as a whole (42.8) and Italy (45.4) were at 2-, 3- and 2-month lows, respectively.
German industrial orders in May rebounded more sharply (1.9%) than expected from April’s 3.2% contraction. Although orders in March-May were 0.2% below the average over the three previous months, May’s reading was 6.2% above the year earlier level, which was the largest year-on-year advance since January.
Investor confidence toward the euro area turned less pessimistic in the latest month, which was to be expected given the sharp drop in energy costs and the new emphasis on diplomacy rather than military force to resolve the Middle East conflict. According to the Sentix barometer, confidence improved around ten index points to a 4-month high of -3.1.
Hong Kong’s private purchasing managers index rose 1.6 points to a 4-month high in June of 52.0. Likewise, the Saudi Arabian non-oil purchasing managers index printed 0.5 points above its May level at a 4-month high of 53.3.
The $42.4 billion Brazilian trade surplus in the first half of 2026 was considerably wider that the $30.2 billion surplus a year earlier.
Postscript: Canada’s composite PMI reading of 47.9 and service sector PMI of 47.9 each flipped from above-50 territory in May to indicated the fastest deterioration pace in three and four months, respectively.
As in Canada, release of the U.S. service sector purchasing manager surveys were delayed by holidays. Unlike Canada, the U.S. S&P Global PMI showed fastest improvement in four months. The S&P Global composite reading was at a 4-month high of 51.9 , with support from the service sector whose score of 51.2 also represented a four-month high. The ISM-compiled non-manufacturing PMI slid back to a 2-month low but, at 54.0, conveyed considerable buoyancy, and the cause of the drop was the price sub-component, which was the least inflationary in four months. Employment rose through 50 and above to a 4-month high, while orders and activity registered 2- and 3-month highs. Helped by these reports, the dollar is maintaining today’s rise, and the Nasdaq index retains an advance of more than 1.0%.
On the central banking front, officials at the Bank of Israel completed a review of monetary policy, and as expected cut the central bank’s interest rate for a second straight time by 25 basis points. This was the fifth reduction of that size since January 2024 and trims the interest rate at 3.50%, its lowest point since the end of 2022. A released statement observes that actual CPI inflation of 1.9% is holding just below the 1-3% target midpoint and that indications of future expected inflation are also a tad under the 1-3% target midpoint.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Bank of Israel, British and Eruoland construction purchasing manager surveys, Euroland PPI and retail sales
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