The US Dollar (USD) sees its gains from Monday against several Asian currencies coming under pressure a bit as markets digest the People’s Bank of China (PBOC) rate cut this Tuesday. Traders and investors  expected more from the PBoC, sending equities lower and pushing Crude Oil down to $71.

On the data front, this week will be mainly on US housing, ranging from permits to construction numbers and house prices. For today, Housing Starts and Building Permits numbers for May are expected to come in at 12:30 GMT . A few Federal Reserve (Fed) members are taking the stage as well. St. Louis Fed President Jim Bullard will talk  at the Barcelona School of Economics at 10:30 GMT, while Federal Reserve Bank of New York President John Williams and Fed’s vice chairman for supervision Michael Barr will speak on leadership at a NY Fed event. 

Daily digest: US Dollar faces a packed and eventful week

• Datapoints of interest for today: At 12:30 GMT a big batch of housing data is set to hit the markets with Housing Starts numbers for May expected to come in at 1,400K against 1,401K last month. Building Permits are expected at 1,423K from 1,417K. On a monthly basis, Building Permits are expected to decline 5% after decreasing 1.4% a month earlier, while Housing Starts are seen dropping 0.8% after a 2.2% increase in April.  Outlier data point between all this housing data will be the Philadelphia Fed non-manufacturing index for June, which came in at  -16 the prior month.  
• Fed’s Bullard will give a speech at the Barcelona School of Economics at 10:30 GMT, and both Fed’s Williams and Barr will speak  on leadership at the NY Fed event at 15:45 GMT. 
• The US Treasury is heading back to the markets for funding as it auctions a 3-month bond and a 6-month bond, both around 15:30 GMT. 
• AUD/USD moved substantially in favor of the US Dollar by over 0.5% after the Royal Bank of Australia (RBA) mentioned in its latest central bank meeting minutes that the surprise interest-rate hike in June is finely balanced, pointing to a possible end of the hiking cycle in Australia. 
• China has cut both its 5-year and 1-year Loan Prime Rate from 4.3% to 4.2% and from 3.65% to 3.55%, respectively. The move was received with disappointment by markets.  
• Japanese Finance Minister Shunichi Suzuki  said that Japan wants foreign exchange rates to move in a stable manner. Suzuki said that they are watching FX on a daily basis and that appropriate action might be necessary. Last intervention dates from the fall of 2022, and any move in this direction could trigger a big-figure move intraday between the Japanese Yen and the US Dollar. 
• The disappointing tone on China impacts commodities, with WTI Crude Oil down nearly 1% to $71.22 and gold up $5 to $1,955. Iron Ore and all other precious metals are on the back foot in the assumption demand will not pick up anytime soon out of China. Even the Baltic Dry Index, a good measure on global trade, is down over 1% for the price per shipping container. All these elements should help global inflation and price pressures abate further. 
• Equities are also in the red,  with China tech stocks leading the losses and the overall Hang Seng Index down 1.60%, which in turn drags other major Asian indices to the downside. European markets are taking over the negative sentiment from Asia and are trading in the red.US equity futures are on the downside as well. 
• The CME Group FedWatch Tool shows that markets are pricing in a 74.4% chance of a 25 basis points (bps) hike on July 26th.   Markets seem to be pricing in just one more hike and done as all other futures for 2023 are pointing to an unchanged rate level. The market is challenging the view of the Fed’s Dot-Plot curve, which showed most Fed members see two more hikes this year. 
• The benchmark 10-year US Treasury bond yield trades at 3.80% and gapped open against the close on Friday as there was no bond trading on Monday due to the public holiday. US bonds are receiving some bids as investors rebalance their exposure against China after a disappointing step in their monetary easing