Key Trading News for today - FOMC minutes in focus 05.07

Key Trading News for today - FOMC minutes in focus 05.07

Summary:

  • Final PMI readings from European economies
  • FOMC minutes are in the spotlight
  • USDJPY keeps its upward momentum

The most relevant event scheduled for today appears to be the FED’s minutes. Although, at its latest meeting the FED managed to prop up the greenback to some extent, there is still quite the blurry outlook when it comes to the future of monetary policy. Besides, there is a bunch of services PMIs (final) which could affect currencies after all.

Services PMIs from European economies (Spain - 8:15, France - 8:45 am BST, Germany - 8:55 am BST, EMU - 9:00 am BST, UK - 9:30 am BST): There are final services PMIs, hence their impact could be downplayed by market’s participants to some extent as they rarely prove to be much different compared with preliminary ones. However, let us recall that initial readings coming from European economies were quite mixed and could have sown some uncertainty amid investors. Given that point of view it’s worth tracking any revisions. On the other hand, a release from the United Kingdom could be a larger mover for the pound as it’ll be the final PMI (there is no an initial one there). Allowing for a potential rate hike which appears to be still on the cards any feebler data could undercut those expectations. Consensuses suggest 55.3 for France, 53.7 for Germany, 54.7 for EMU and 53.5 for the UK.

3:00 pm BST - US durable goods orders (final): The USD has kicked off a new trading week with decent gains which subsequently have been trimmed to some extent. Either way, in order to get the stronger greenback there is a need to get better than expected macroeconomic releases. There is no doubt that main focus with regard to the US dollar is on the FOMC’s minutes, durable goods orders could are undoubtedly worth looking at as well. The consensus points to 0.1% mom for a core measure (ex-transport), while the estimation for a headline figure is at -1.1% mom - both are for May.

7:00 pm BST - FOMC minutes: This time there should be no a big event for USD traders given a stance which was presented by the FED at its June’s meeting. The FED’s attitude seems to be clear that a cycle of rate hikes will be continued as they think that a weakness seen in the data has been caused just by temporary factors. Since then, there has been no a significant improvement in the data though. All in all, the USD remains still quite cheap e.g. compared with the bond market, and could be prone to an increase in the aftermath of any more hawkish remarks.

9:40 pm BST - oil stocks report by API: As usual the API reading is treated as a preliminary data before the DoE report which is published one day later. Taking account of an ongoing rebound in oil prices one could suppose that another downside surprise could contest that rally, at least until the DoE’s report is known.

 

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