Macro Monday LIVE | Biden Withdraws from Presidential Race; Endorses Kamala Harris

Macro Specialist James Brodie and Research Analyst Harry Nedeljkovic weigh in on the latest news in the presidential campaign, discussing who the Democratic Party will select as a replacement for Joe Biden as their candidate, who will likely be chosen as a running mate, how Donald Trump’s could react, and subsequently how these critical decisions may affect markets.
US June retail sales remain unchanged (0.0% m/m; est. -0.3%) while industrial production is up +0.6% m/m (est. +0.3%). Powell said yesterday “Now that inflation has come down and the labour market has indeed cooled off, we’re going to be looking at both mandates.” Looking at other US data, jobless claims are trending higher.
The Chinese central bank also unexpectedly cut key lending rates to new record lows at the July fixing to aid the country’s fragile economic recovery following weak Q2 GDP readings. In Japan, the yen continued its rally to below 157 per dollar, however, the Nikkei fell 1.16% on Monday morning to 3-week lows.
In the US, the Nasdaq had its worst day since 2022 last week, whilst the S&P 500 has now gone 350 trading days without a 2% correction (the longest since February 2007). According to GS Prime, the hedge fund de-grossing activity over the past 5 sessions is the largest in 20 months and ranks in the 99th percentile over the past 5 years.
Canadian CPI has fallen to 2.7%, with the probability of rate cuts for July 24th having now risen to 90%.
The chart of the week this week is Nvidia, with critical support at 117.80.
Key data releases this week:
Tuesday; GFK Consumer and IFO Business sentiment
Wednesday; Eurozone Manufacturing & Services PMI
Thursday; Q2 advance GDP (2% expected annualised)
Friday; Core PCE (est. +0.1% m/m, 2.4% y/y; prev. 2.6%)