26/07/2024
Written by: Ian Morley
Summary:
Expectations for a June interest rate cut by the Federal Reserve diminished following a robust jobs report revealing the addition of 303,000 jobs in March, surpassing the anticipated 214,000. The surge in 10-year treasury yields to 4.4%, the highest since November 2023, accompanied initial gains in the USD. However, these gains waned towards the close of European trading hours despite remarks from Fed Logan cautioning against premature rate cuts.
Speeches:
Market Insight:
This week’s focal points include the release of US Consumer Price Index (CPI) and Producer Price Index (PPI) figures on Wednesday and Thursday, offering insights into the inflationary landscape in the US. On Thursday, attention turns to the European Central Bank’s (ECB) monetary policy meeting, where no rate cut is currently anticipated, though clearer indications towards a cut in June might be provided. Additionally, UK GDP data for February will be scrutinised, indicating a growth deceleration from 0.2% in January to 0.1%.
Market sentiment this morning reflects a sense of relief following indications of progress in the Middle East. Israel’s partial troop withdrawal from Gaza and reports suggesting Iran’s commitment to refraining from retaliatory measures against recent Israeli attacks in the event of a Gaza ceasefire have bolstered risk appetite. This renewed appetite could potentially drive up GBPUSD and EURUSD ahead of the US inflation figures release on Wednesday.