26/07/2024
Written by: Ian Morley
Summary:
GBP experienced broad gains yesterday and into this morning ahead of the release of job numbers. Conversely, USD faced broad declines, albeit limited, following the New York Fed’s survey indicating an increase in consumer expectations for inflation over the next year. This trend aligns with last Friday’s Fed discussions, which leaned towards a hawkish stance, particularly with Fed member Bowman suggesting that rates might remain unchanged this year.
Speeches:
Market Insight:
Today’s data suggests a cooling in the job market despite higher wage growth. April saw a decline of 85,000 individuals on payrolls, well below expectations, while the unemployment rate rose to 4.3%. Market probability for a June interest rate cut remains at 57%, keeping GBP relatively stable. Next Wednesday’s inflation report will be pivotal for GBP and the BoE. BoE member Pill is scheduled to speak today.
Today, the US releases inflation figures at a production level in the form of Producer Price Index (PPI). The core number will be crucial in determining domestic price pressures, and a higher reading could reinforce recent Fed discussions. This data, coupled with tomorrow’s Consumer Price Index (CPI) numbers, may provide support for USD. Fed Powell is also scheduled to speak today.