It’s an action-packed economic calendar today that sees data released from across the globe mixed with central bank speak as well as an interest rate decision.
First up, it’s the UK’s turn to have its economic health scrutinised. Manufacturing and industrial production as well as the monthly snapshot or GDP will all be released at 0930. Many economists are expecting a set of significantly bad numbers and are bracing for a contractionary reading for June’s GDP. The pound took another battering yesterday falling to support levels at €1.1110 and $1.2440 against the euro and US dollar, respectively. If these levels are breached today then we face a whole new ball game in regard to the next potential areas of support.
The afternoon session sees testimony from Federal Reserve chairman, Jay Powell. There’s been huge anticipation over his 2-day testimony with market participants urging to discover whether the Fed are likely to lower interest rates this month or not. After last week’s impressive jobs report it will be hard for the Fed chair to be overly dovish but the market may be under-representing the Fed’s commitment to achieve its mandate through the monitoring of situations outside the US economy. For example, if the UK and eurozone enter recession this is one huge collective buyer of US produce. Such a scenario would have a significantly detrimental impact on the US economy. Therefore, the Fed must sometimes look outside the domestic economy to ensure it stays on track internally. Additionally, inflation has been persistently low in the US as well as the rest of the globe. Looser monetary conditions would go a long way in stoking up an economic theme that’s been elusive over the past decade. Powell’s testimony begins at 3pm!
In addition to Powell, the 3pm hour sees an interest rate decision from the Bank of Canada. No change is expected, the central bank are expected to maintain rates at 1.75%. At 7pm we then hand back over to the Federal Reserve for their latest set of meeting minutes from their gathering at the end of June.
Written by Viv Savani. 9:01am, July 10th 2019
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8:51am, July 8th 2019
Greenback strengthens as US jobs report bounces back…