26/07/2024
Written by: Ian Morley
Summary:
Currency markets experienced another session of limited movement yesterday ahead of today’s significant US Inflation data release and the minutes from the recent FOMC meeting. Sterling managed to secure slight gains following the British Retail Consortium’s report on UK Retail Sales, indicating a 3.2% year-on-year increase, surpassing expectations of 1.8%. This surge was attributed to early Easter discounting, particularly boosting food sales. Despite escalating Bond Yields, the US dollar maintained a sideways trajectory, buoyed by expectations of a strengthening soft-landing scenario.
Speeches:
Market Insight:
All attention is currently directed towards the upcoming US inflation data, projected to reveal a 0.3% monthly increase. Recent remarks from Fed hawks, revising their rate cut forecasts for the year from 3 to “1 or 2,” have propelled US bond yields upward. However, intriguingly, this shift has yet to translate into a rally for the US dollar. The growing positivity in the general market sentiment, indicated by the uptick in global equity markets, might be influencing this dynamic as riskier currencies continue to attract investment inflows. With the escalating prices of commodities such as oil, copper, and cocoa, central banks may face challenges in taming inflationary pressures.