Quiet Day For Markets with Fed Speeches and Canadian Inflation Data
Today stands to be relatively quiet in terms of markets, with a few key events that could capture traders’ interest:
12:00 PM – USD: Fed’s Bowman Speech: Federal Reserve Governor Michelle Bowman will deliver a speech. Investors will listen for hints on future monetary policy, but significant deviations from the current Fed stance are unlikely.
1:30 PM – CAD: Consumer Price Index (YoY) (May): The Canadian CPI for May is expected at 2.6%, slightly down from April’s 2.7%. This data is crucial for the Bank of Canada’s interest rate decisions. A lower reading could support a hold on rate hikes, while a higher figure might prompt a more hawkish approach.
5:00 PM – USD: Fed’s Cook Speech: Federal Reserve Governor Lisa Cook will speak at the Economic Club of New York, discussing the US economic outlook. As a 2024 FOMC voting member, her insights on inflation and labour markets are highly anticipated, likely impacting tomorrow’s trading more than today’s.
Currency Movements Overview:
Euro/USD: Euro fell to about 1.0850 against the US dollar. The European Central Bank showed caution on money policy, despite some signs of recovery in Europe. Investors are watching the upcoming policy meeting for more cues.
Pound/USD: British Pound had a small drop, trading at 1.2700 against the US dollar. Recent UK economic data, like lower retail sales, puts pressure on the Pound. There are also concerns about potential political trouble.
USD/Yen: Japanese Yen weakened, trading at 143.20. Bank of Japan’s cautious money policy contrasts with the Fed’s stronger stance, leading to the Yen’s fall. Japan’s trade deficit also adds pressure.
AUD/USD: Australian Dollar stayed low, trading near 0.6750. Worries about China’s economic slowdown, a big trade partner for Australia, have hurt the Aussie dollar. Reserve Bank of Australia’s choice to keep interest rates unchanged hasn’t helped.
More Economic News: America House Market:
U.S. Housing Market: New reports show less home sales in May. Big mortgages and higher home prices make buying harder, could slow market later. Eurozone Prices: Early data says prices in Europe stay high. In June, prices could rise by 5.6%. ECB worries about high prices.
China’s Economic Outlook: China’s economic growth appears to be slowing, with the latest Purchasing Managers’ Index (PMI) for manufacturing coming in at 48.5, indicating contraction. The Chinese government’s efforts to stimulate the economy, including infrastructure spending and tax cuts, are yet to show significant results.
UK Stores: UK sales drop by 0.3% in May, shows how people struggle with high costs and low pay. This may hurt UK’s money outlook.
World Oil and Gas: Oil stays at $70 after ups and downs. OPEC+ talks may change prices. Gas in Europe stays high due to less gas and battles. To sum up, money markets react to data and policies, with USD strong. Other signs show doubts, shows leaders have hard choices. More news will come as the week goes on.
Sources:
- Bloomberg – Dollar Index Rises
- ECB Monetary Policy Update – June 2024
- UK Retail Sales Data – Office for National Statistics
- China’s Economic Slowdown
- Reserve Bank of Australia Announcement
- U.S. Housing Market Report – National Association of Realtors
- Eurozone CPI Data – Eurostat
- UK Retail Sales Report – Office for National Statistics
- OPEC+ Meeting Insights – Financial Times