Market Insight 07-05-2024

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  • Market Insight 07-05-2024


Friday’s US job numbers fell below expectations, leading to a weaker USD due to lower job additions, subdued wage growth, and higher unemployment. This prompted markets to increase the odds of a Fed rate cut in September, earlier than previously anticipated. Although the initial reaction weakened the USD, GBPUSD and EURUSD hit fresh 1-month highs before both pairs retraced.


  • EUR: ECB De Cos and Nagel
  • USD: Fed Kashkari

Market Insight:

With a shorter week ahead, attention is primarily on the UK, with the Bank of England meeting on Thursday and GDP numbers for Q1. Recent comments from BoE members indicate a divergence in views on inflationary and monetary policy, suggesting it may be premature for the Bank to signal a rate cut in June (currently 50% probability). The vote split on Thursday will be closely watched to gauge the timing of potential rate cuts. Friday’s GDP numbers are expected to show a rebound to 0.4% growth in Q1, while GBP starts the day lower.

Following last week’s Fed meeting and Friday’s job data, markets have discounted the likelihood of a Fed rate hike this year. As a result, USD trading is expected to be range-bound, especially with a quiet US calendar. Today’s focus is on EU retail sales and Fed speaker Kashkari’s insights on recent events.


Recent events in the US have erased hawkish rate expectations, bringing forward the anticipation of a rate cut to September. Consequently, recent USD gains have retraced, and we anticipate consolidation this week amid a subdued US calendar.