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USD/CAD fluctuates around 1.3650 during Asian session as investors await US employment data
The USD/CAD pair is trading close to 1.3650 during the Asian session on Wednesday. Attention is on the US Nonfarm Payrolls (NFP) data for June. The ADP Employment Change data for June, coming out at 12:15 GMT, is also important for predicting the Federal Reserve’s monetary policy.
According to the CME FedWatch tool, there’s a strong chance the Fed will cut interest rates in September after keeping them steady this month. Ongoing US trade deadlines and recent tax changes are making many traders cautious, which is affecting market movements.
Tensions between the US and Canada have reduced, which could support the Canadian Dollar. Trade discussions with Canada may restart soon since the digital service tax on US tech companies has been withdrawn.
Goldman Sachs expects an upcoming S&P 500 rally, but it may weaken by August.
The S&P 500 is likely to keep rising in the weeks ahead. This is driven by better liquidity, lower volatility, fewer recession worries, and positive seasonal trends. Historically, July is the strongest month for the S&P 500, with the first half usually outperforming the second half.
Key reasons for this rally include improved liquidity, lower volatility, and optimism about geopolitical issues, trade discussions, and possible rate cuts. Systematic investors still have plenty of capital to spend, which helps boost market confidence.
Concentration Risks
Despite the positive outlook, some risks remain. The rally has focused on lower-quality stocks. Additionally, there is a quick rise in bullish positioning that may challenge long-term sustainability. This article notes the recent strength of the S&P 500, highlighting solid conditions that have supported its growth—such as steady financial flows, reduced market swings, less anxiety about a recession, and seasonal factors that typically help stocks in July. Historically, the early part of July tends to deliver better returns than the latter part, indicating that timing is especially important now. The gains are not unexpected. Improved liquidity and steadier volatility have made it easier for investors to be optimistic. Confidence is rising as fears about global conflicts, trade barriers, and interest rate directions have eased. Importantly, discussions of rate cuts may enhance valuations and strengthen equities.Systematic Fund Influence
Funds that use systematic strategies, which are usually slow to respond, seem to have room to increase their exposure. This is important because it means there is still buying power available—not just discretionary funds at play. These systematic flows tend to be mechanical, looking for areas of high momentum, and can extend trends even when the narratives seem tired. That said, there are some warning signs. The most recent gains have come from stocks without the quality investors usually seek. Stocks with weaker balance sheets or inconsistent earnings are leading the charge, and while this pattern can create quick, self-reinforcing gains, it can become overstretched without improving fundamentals. Investors should also monitor positioning. Traders have quickly become more bullish, which is clear from options data, futures exposure, and sentiment surveys. This increased optimism can make the market vulnerable to sudden drops if upcoming data disappoints. Rapidly built long positions often have little patience. In the upcoming days, we should pay attention to how market breadth develops. If gains spread beyond the initial winners, it can help lessen market fragility. While thin markets can rise, they typically do not hold. Also, since the first half of July generally performs better, the opportunity for tactical exposure might be shorter than expected. We believe it’s crucial to be responsive now. Earnings season is approaching, which will test current valuations. Expectations have increased recently. While surprises are still welcomed, the bar has been raised. Those observing derivatives should adjust their strategies accordingly, especially regarding the pricing of near-term volatility and the risk of gaps. Lastly, macroeconomic factors remain important. As speculation about rate changes grows, attention will shift toward confirmation. Supporting bets on cuts without a clear trigger leaves exposure more sensitive than it seems, especially for complex trades aimed at upside potential. It’s wise to be prepared for that. Create your live VT Markets account and start trading now.AUD/JPY rises near 94.50 as Trump discusses tariffs, recovering losses from the previous session
AUD/JPY has risen as the Japanese Yen weakens due to uncertainty over potential US tariffs of 30% or 35%. Additionally, the Bank of Japan’s cautious approach to raising interest rates poses more challenges for the Yen.
The AUD/JPY pair has bounced back, sitting around 94.50 during the Asian trading hours. This gain follows recent comments from President Trump regarding potential tariffs on Japan, without extending the current deadline.
Bank of Japan Stance
The Bank of Japan is cautious about changing its monetary policy due to economic risks. Kazuyuki Masu and Governor Kazuo Ueda highlight that any changes in interest rates will depend on inflation trends. On the other hand, the Australian Dollar is facing challenges due to disappointing economic data. Retail Sales in Australia increased by only 0.2% month-over-month in May, missing the expected 0.4%. Building Permits saw a better performance, rising by 3.2%. Higher interest rates can make a currency more attractive to global investors. However, they can also decrease gold prices as the appeal of interest-bearing assets rises compared to non-yielding ones.Fed Funds Rate Impact
The Fed funds rate—the overnight lending rate between US banks—affects market behavior and expectations. This rate is set by the Federal Reserve, and the CME FedWatch tool tracks future market predictions. With mounting pressure on the Japanese Yen from political uncertainty and a cautious central bank, it’s not surprising to see AUD/JPY move higher. The pair’s current position around 94.50 reflects ongoing market reactions to a shift in sentiment driven by potential trade restrictions and Japan’s domestic concerns. Trump’s tariff comments—suggesting a possible 30% to 35% import rate on products from Japan—have created anxiety. While one might expect some diplomatic softening, any perceived delay or uncertainty from U.S. policymakers tends to unsettle the Yen. Currency markets dislike ambiguity, and with the existing trade agreements nearing their end, the recent decline in Yen strength is more a recalibration than a surprise. Ueda’s focus on a data-driven approach to interest rate decisions serves to stabilize the situation, although it appears increasingly conservative given the rising global rates. Masu’s remarks further support this cautious stance, highlighting that any future rate hikes are likely to be small and slow, depending on steady inflation. This dovish outlook makes the Yen less attractive for carry trades, especially compared to the more aggressive G10 central banks. Meanwhile, Australia faces its own challenges. The stronger Aussie Dollar against the Yen hasn’t masked the underwhelming domestic figures. A retail sales increase of just 0.2%, half of what was expected, suggests sluggish consumer activity. The modest 3.2% rise in building permits is not robust enough to significantly impact monetary expectations. Weak demand figures could influence rate expectations moving forward, especially if similar trends appear in other sectors. It’s also important to consider developments across the Pacific. The Fed funds rate, a significant benchmark for comparing international yields, plays a critical role in cross-currency interest. With the CME FedWatch tool showing expectations for further hikes or holds by the U.S. Federal Reserve, interest rate differences continue to guide currency flows, including investments in Australian assets. We are closely monitoring how this environment affects gold and overall risk appetite. Rising U.S. rates typically increase the opportunity cost of holding non-yielding assets like gold, leading to recent price softness. This principle applies here as well—when a central bank is reluctant to raise borrowing costs, it becomes difficult to justify the strength of its currency without other risk factors at play. Market participants should remain vigilant for formal announcements from either Tokyo or Washington that could solidify trade policy direction. Until then, expect cautious optimism in AUD/JPY to persist unless broader risk-off sentiment or surprising domestic inflation data shifts the rate outlook. For now, a watchful approach seems most in tune with the current market dynamics. Create your live VT Markets account and start trading now.Dividend Adjustment Notice – Jul 02 ,2025
Dear Client,
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
Australia’s retail sales rose by 0.2% in May, missing growth expectations
Australian retail sales rose by 0.2% in May 2025, which is below the expected 0.4% increase. This is the fourth month in a row of weak spending growth, following a 0.1% decline the previous month.
In the past year, retail sales increased by 3.3%, down from 3.8%. This is the slowest annual growth rate since November last year. Notably, food sales saw a decline, which is unusual, while clothing and department stores enjoyed some gains.
Despite the current retail sales data, the Reserve Bank of Australia might still consider a rate cut in their upcoming meeting on July 7 and 8. While not every analyst agrees, many anticipate a 25 basis point cut.
The latest retail sales figures show that consumer spending remains weak, with only a 0.2% rise in May 2025, far below expectations. Traders should recognize this as a trend rather than an isolated event. Four consecutive months of poor results indicate that households are cutting back on spending, despite earlier hopes for stronger consumer activity.
Looking at the annual data, the growth rate decreased from 3.8% to 3.3%, marking the lowest annual increase since late last year. This could strengthen arguments for easing monetary policy. The decline in food sales is particularly concerning since they have typically remained stable. When consumers start reducing their grocery budgets, it suggests financial strain on essential spending. Although clothing and department stores are seeing growth, these areas are more cyclical and not necessities.
The Reserve Bank’s upcoming decision on July 7 and 8 is crucial. While opinions among economists vary, many expect a 25 basis point reduction in the cash rate. Lower rates would aim to encourage borrowing and make financial conditions easier, especially given the weak consumer demand. Traders should carefully consider this possibility.
We believe the focus on interest rates is shifting from inflation risks to domestic activity data like retail sales. This shift changes how we approach rate-sensitive financial instruments and expectations for future guidance. The gap between expected and actual data has implications that go beyond immediate market reactions.
As consumption slows, short-term interest rate futures should reflect a higher likelihood of easing, especially if indicators like employment weaken. The Reserve Bank’s commitment to expansionary policy will be tested in early Q3, meaning expectations might change and impact risk pricing across different assets.
This month, with the focus on monetary policy in response to growth rather than inflation, we need to view retail numbers as part of a broader trend—rather than an outlier. For options trading, speculation about rates is likely to remain high, and implied volatility might stay above recent averages, particularly in short-term interest rate contracts. The July meeting matters, but the guidance and notes that follow could influence market confidence throughout late 2025.
The Australian dollar (AUD) has already softened slightly, affecting options skew recently. This market trend aligns with changing expectations for rate cuts and supports gradual repositioning. Floaters could become less attractive if easing becomes more certain.
While the headline figures may not seem alarming on their own, when considered alongside other data from this quarter, they show a clearer trend towards a bias for easing monetary policy. We should adjust our strategies accordingly without chasing every discrepancy. Instead, let the implied rates and spreads guide hedges, especially as pricing adjusts to upcoming consumer price index (CPI) and wages data. Longer-term contracts may react more slowly, but short-term signals will emerge quickly.
Gold prices in Saudi Arabia remained stable and largely unchanged throughout the day.
Gold prices in Saudi Arabia have stayed steady. On Wednesday, gold was priced at 402.77 Saudi Riyals per gram, the same as the previous day.
The price per tola was nearly unchanged at SAR 4,697.83, just slightly down from SAR 4,694.75. Other measurements included 10 grams at SAR 4,027.70 and a troy ounce at SAR 12,527.55.
How Gold Prices are Set
Gold prices in Saudi Arabia are based on international prices, adjusted for the local currency and measurement units. These prices change daily and may vary slightly from actual market rates. Gold has always been a reliable form of value, especially during economic uncertainty. It is considered a safe-haven asset. Central banks play a significant role, increasing their gold reserves substantially, especially in 2022. Gold prices typically go up when the US Dollar weakens or interest rates drop. On the other hand, rising stock markets can decrease gold’s value, while falling markets tend to boost it. Currently, gold prices have shown minimal movement, with both gram and tola values remaining stable. With prices at SAR 402.77 per gram and SAR 4,697.83 per tola, there seems to be little activity in spot trading. This suggests that the market is awaiting a strong catalyst. When both short-term changes and major news fail to impact prices, it often reflects a cautious sentiment among traders, especially those with leveraged positions. Despite only minor fluctuations, the key lies in what’s not changing. These stable prices indicate there’s no strong buying or selling pressure. Such a situation can build tension quietly and could quickly shift with economic or geopolitical events, complicating timing for those looking for larger profits.Gold Pricing and Global Impact
Prices like SAR 4,027.70 for 10 grams and SAR 12,527.55 for a troy ounce are based on global benchmarks adjusted to local currency. However, don’t assume these published prices are always available for immediate trading as they may vary slightly from real quotes provided by traders due to extra fees and markups. This matters significantly when making large trades or layered positions, where unplanned price changes can disrupt trades. Since prices are adjusted daily based on global trends, they tend to react rather than predict changes. It’s essential to consider this while using local price data to create short-term contracts. The adjustment process is slightly delayed, making precise hedging challenging. For effective trading strategies, rely on global data and handle currency adjustments internally. Given its historical role as a safe-haven, gold often reacts strongly during economic policy changes or political instability. The significant accumulation of gold by central banks in 2022, looking to protect their economies, shows a shift among institutional investors. These players are less about speculation, which alters how physical gold connects with synthetic prices. They help stabilize sharp price drops and support uptrends, making significant losses less likely near institutional price levels. The relationship between gold and the US Dollar is essential, but the strength of that relationship is variable. A slight drop in the Dollar might not impact gold prices unless it’s paired with signals of changing interest rates. If the treasury market projects slower rate increases or even slight cuts, that can affect gold more significantly than currency fluctuations alone. Therefore, we focus on implied interest rate expectations rather than just short-term currency trends. Stock markets also influence gold prices. During stock market surges, investors often pull money from commodities like gold in search of higher returns. This isn’t just about safety; it’s about profit potential. When tech stocks and cyclical shares perform well, gold demand can weaken. However, when the markets fluctuate or credit tightens, gold often regains its appeal. Thus, we pay closer attention to trends in equity fund flows and crossover charts than to spot price movements. In the upcoming weeks, as trading becomes more speculative, minor price variations will be important. While tight trading ranges might seem dull, they offer low-cost opportunities for traders using derivatives—until they don’t. When prices do break out, it typically happens suddenly and sharply. Currently, these stable prices may look calm, but they represent underlying tension. We will keep an eye on any sudden spikes in trading volume alongside slight price shifts—those often signal the beginning of significant changes. Create your live VT Markets account and start trading now.The PBOC sets the yuan midpoint at 7.1546, resulting in a net drain of 266.8 billion yuan.
The People’s Bank of China (PBOC) determines the daily midpoint for the yuan, also known as the renminbi. This exchange rate system allows the yuan to move within a range of +/- 2% around the midpoint.
The last recorded closing rate for the yuan was 7.1650. Recently, the PBOC added 98.5 billion yuan to the market through seven-day reverse repos at a rate of 1.40%.
Yuan Liquidity Management
Today, 365.3 billion yuan is maturing, leading to a net drain of 266.8 billion yuan. This shows how the PBOC is adjusting liquidity in the financial system. This indicates that the PBOC continues to actively manage the yuan through its daily midpoint system and liquidity operations. The midpoint acts as a central guide for currency fluctuations, allowing a maximum deviation of 2% in either direction. This creates a managed floating exchange rate — not fully free but not completely controlled. The recent injection of 98.5 billion yuan through reverse repos shows the central bank’s commitment to adding short-term liquidity. However, since 365.3 billion yuan is set to mature today, this results in a net reduction of 266.8 billion yuan, suggesting a tightening move. Typically, such a reduction aims to raise interest rates or at least prevent them from falling. Recently, the PBOC has been careful with liquidity adjustments. This caution reflects a balance between encouraging domestic growth and preventing downward pressure on the yuan, especially as global interest rates shift and concerns about capital flows increase.Market Dynamics and Observations
These liquidity mechanics are important indicators. They reveal not broad policy shifts but rather the fine-tuning happening within specific risk corridors. When less liquidity is injected than what matures, as seen here, conditions tighten slightly. This can influence short-term rates and affect market expectations regarding foreign exchange-linked derivatives. Huang, who monitors PBOC actions, has noted that these net drains can signal times when the authorities may allow slight appreciation of the yuan. This isn’t due to an overheated economy but possibly because they feel confident in upcoming economic data or want to stabilize the currency without direct market intervention. For derivative traders, it’s essential to look at these actions as a series rather than as isolated events. This is especially crucial in a week when maturing repos significantly outweigh injections. Such patterns can provide insights into broader market intentions and pricing dynamics, even without official guidance. Li’s insights from the last quarter offer useful context: during periods of tighter liquidity, swap rates gradually increased, and slight upward pressure was observed on front-end implied volatility curves in yuan-denominated exchanges. We’re beginning to see similar trends in recent days, though they aren’t extreme. Today’s operations show that authorities are cautious about flooding the system with cash, even amid ongoing uncertainties in property and local government financing. This restraint is significant as it indicates that they are closely monitoring external factors, especially the dollar’s strength, and responding in measured doses. When assessing exposures or hedging strategies, we pay attention to liquidity patterns over time. One day’s trend is informative, but a week’s pattern is more telling. Quick shifts in repo net flows can make short-term bets on the yuan more sensitive to data surprises and changes in rate differentials. Wu has pointed out that these maturity amounts are substantial yet predictable. This predictability helps market participants anticipate potential net injections or drains and shape their strategies accordingly, avoiding uncertainty. It suggests that opportunities may be apparent where implied rates and expected policy paths are misaligned, particularly for shorter tenors. In this environment, focusing on rate spreads and implied volatility structures may be more beneficial than taking directional bets, especially when downside risks are being closely monitored. Create your live VT Markets account and start trading now.Gold prices in the Philippines remain steady today, showing little movement based on recent data.
Gold prices in the Philippines stayed steady on Wednesday. The price was 6,050.44 Philippine Pesos (PHP) per gram and 70,571.20 PHP per tola, showing only slight changes from the day before.
These prices come from international rates, converted through USD/PHP exchange rates. They are updated daily but may vary slightly from local prices.
Gold as a Safe Haven Asset
Gold has long been valued as a way to exchange and store wealth. It’s commonly seen as a reliable asset during uncertain times and a safeguard against inflation and currency decline. Central banks are the biggest gold holders, adding 1,136 tonnes valued at about $70 billion to their reserves in 2022. Emerging economies are rapidly increasing their reserves to promote economic stability. Gold usually moves in the opposite direction of the US Dollar and riskier assets. When the Dollar weakens, gold prices often rise. Interest rates and political stability also affect gold prices. Several things can cause changes in gold prices. Interest rates, economic issues, and fluctuations in the US Dollar can all have an impact. Since gold doesn’t yield interest, it is particularly sensitive to interest rate changes.Gold Prices and Global Market Forces
The steady gold prices in the Philippines today reflect a global balance influenced by external factors. With local prices at 6,050.44 PHP per gram and 70,571.20 PHP per tola, the market is stable, which may suggest a calm before potential changes. These prices rely on global market data and real-time currency conversions. They are closely linked to the USD, showing that gold’s value relates more to international markets than local changes. Gold’s price reflects how the Peso compares to the Dollar and the Dollar’s movements in global contexts. Throughout history, gold has held two roles. It’s a currency relic and a safe store of value when confidence in paper currencies or risky markets falters. Currently, gold’s stability comes as traders watch interest rate trends and inflation. Essentially, the focus isn’t just on the metal but also on market sentiment reflected in gold prices. It’s important to note that central bank activities are significant. When developing economies increase their gold reserves to over 1,100 tonnes in a year, it signals policy intentions, not just diversification. This accumulation, worth billions of dollars, shows that even with no yield, gold can provide balance during periods of financial stress. For those involved in trading, gold’s fluctuations are tied to US monetary policy. The inverse relationship with the Dollar is important and measurable. As the Federal Reserve adjusts its strategies and expectations about borrowing costs, any rate increases tend to affect non-yielding assets like gold. Therefore, we should pay attention to even minor changes in bond markets. Keep in mind how gold responds to various events. Global political instability often leads to increased investments in gold as a safe haven. Tightening financial conditions can make gold less appealing, especially for leveraged investors. This isn’t just about the price; it’s about real returns and positioning in the market. As we examine the market, implied volatility in gold options may stay low unless broader asset classes shift sentiments. Traders should stay alert for any unexpected news about rate changes or Dollar pressures, particularly from Washington or central banks in Europe or East Asia. In the coming weeks, we may see less direction and more fluctuations until new macro data or monetary policies create additional tension. Whatever happens, gold prices will likely reflect the broader market rather than move independently. Create your live VT Markets account and start trading now.Increase in August output by 411,000 bpd expected at upcoming OPEC+ meeting
OPEC+ will meet on July 6 to discuss raising oil production for August by 411,000 barrels per day. Russian Deputy Prime Minister Alexander Novak stated that the final decision will be made during this traditional meeting.
Since April, OPEC+ has been slowly increasing oil output, adding 411,000 barrels per day each month. This gradual rise aims to reverse earlier voluntary cuts of 2.2 million barrels per day.
This month-by-month increase reflects a careful approach to unwind past reductions. The voluntary cuts were originally made due to uncertainty in demand and stagnant prices. Since April, however, we’ve seen a steady return to higher production. This helps balance the market by meeting growing demand without oversupplying inventories. Novak’s remarks highlight that group consensus is crucial, with policy decisions confirmed at the July 6 meeting.
With this plan for a consistent monthly increase, the supply side looks predictable in the short term. This stability can help set pricing expectations, although the market can still respond to changes in demand or trader sentiment. It’s unlikely that the rate of increase will exceed the current plan of 411,000 barrels per day. Therefore, we can expect traders in options and futures markets to closely follow this output guidance without major surprises.
For those focusing on derivatives, this consistent pattern is important. The eased supply from OPEC+ is already reflected in many mid-term contracts. Therefore, volatility spikes are more likely to come from shifts in demand—like changes in refinery usage or transport fuel consumption—rather than from production changes. Pricing now reacts more to demand outlooks than to production adjustments, especially when these adjustments are well communicated.
The July meeting will likely act as a checkpoint rather than a pivotal moment. Since previous production increases have been gradual and stable, pricing models expect this trend to continue rather than change significantly. Consequently, spread structures have become stable within a manageable range. For short-term options expiring in late July or early August, implied volatility is low compared to historical levels.
At the same time, there’s been a rise in strategic interest in contracts for September and October. This interest is driven by U.S. economic data that varies with seasonal oil demand from power generation and travel. Different expectations can create opportunities for traders as they navigate through standard supply guidance.
The chances of unexpected moves in OPEC+ strategy seem limited. However, any significant changes—like non-compliance or geopolitical issues—could quickly affect pricing benchmarks. We suggest protecting long-term positions with spreads connected to refinery margins, which can safeguard against gradual shifts while responding to short-term signals. Execution is crucial, especially when market liquidity decreases around regional holidays or reporting periods.
In the upcoming weeks, it’s important to analyze backwardation levels and storage dynamics to see if futures prices reflect actual barrel movement or just speculative activity. As output increases as planned, futures curves may provide less directional signals and more stability.
Gold prices remain stable in the United Arab Emirates today.
Gold prices in the United Arab Emirates have stayed steady at 394.40 AED per gram, slightly up from 394.15 AED the day before. The price per tola is also unchanged, sitting at 4,600.18 AED, compared to 4,597.26 AED earlier.
Gold prices in the UAE are based on international market rates, converted to local currency and adjusted for market changes. Gold is often viewed as a safe investment, frequently purchased by central banks to diversify their reserves and promote economic stability.
