- Federal Reserve Chairman Jerome Powell delivered the first part of his semi-annual testimony yesterday, with his comments broadly inline with his FOMC colleagues. His remarks suggest that the central bank is expecting to ease, but he gave no indication of timing. He did comment that “this is no longer an overheating economy” adding that “labor markets appear to be fully back in balance.” This could be interpreted as further cooling, and a slowing in the jobs market could signal rate cuts. Powell also added, “meeting to meeting” in his speech, which could keep a September rate cut on the table. He wraps up his testimony later today and the attention then shifts to tomorrow’s key CPI data to see if that provides any clues on when the Fed will shift policy.
- The pound has dropped a tad against the US dollar, back trading on a 1.27 handle ahead of a key speech from BoE Chief Economist Huw Pill later today. Markets will be closely monitoring Huw’s comments to see if he continues recent dovish remarks following the recent slowdown in inflationary pressures. His speech comes ahead of next weeks key inflation report which is the final piece of the data puzzle ahead of the 1 August policy meeting.
- EURUSD continues to consolidate, seemingly going nowhere fast and has struggled to significantly break higher over the past few days, remaining anchored around the 1.0820 level. The pair may be influenced by a surprise in tomorrow’s US CPI report with a breach of either 1.0790 or 1.0845 required to signify fresh direction.
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