Previous Day's Market Highlights
Sterling came under pressure yesterday amidst recent Brexit headlines and as Bank of England Governor Carney cautioned on the economic risks of a no-deal Brexit scenario during his testimony on the Financial Stability Report. UK labour market data were largely in line with expectations, keeping open the door for a possible August rate hike. Meanwhile, the dollar saw a bid tone as Fed Chair Powell testified, and this pushed sterling-dollar lower towards 1.31 and euro-dollar below 1.17.
The first day of Fed Chair Powell’s semi-annual testimony contained little new information as he reiterated the need for a gradual rise in interest rates and was upbeat on the labour market and the economy.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
A gain in the Consumer Price Index today could further support market expectations of a possible August bank rate hike (09:30 BST) and see some sterling strength. However, Brexit headlines continue to pose a downside risk as the preferred October deadline for a Brexit deal nears. After falling below 1.31, sterling-dollar is eyeing the lows of 1.3049 it hit in late June.
Final Eurozone CPI (10:00) is forecast to confirm headline inflation hit 2% in June while core inflation remained subdued at 1%; a lack of revision may have a muted impact.
In the afternoon, the dollar will keep an eye on housing data (13:30) and the second day of Fed Chair Powell’s testimony (15:00). The impact of the latter will likely be limited given Fed Chair Powell’s testimony is unlikely to have changed since yesterday.
Overnight, a pick-up in Employment Change could provide the Aussie with support. Australia’s Unemployment Rate is expected to remain steady at 5.4%.
Today's Economic Calendar
|9:00am||GBP||Consumer Price Index YoY (Jun)||2.6%||2.4%|
|9:30am||GBP||Core CPI YoY (Jun)||2.2%||2.1%|
|10:00am||EUR||CPI YoY (Jun)||2.0%||2.0%|
|10:00am||EUR||Core CPI YoY (Jun)||1.0%||1.0%|
|1:30pm||USD||Housing Starts MoM (Jun)||1.32M||1.35M|
|1:30pm||USD||Building Permits MoM (Jun)||1.330M||1.301M|
|3:00pm||USD||Fed Chair Powell's Testimony|
|3:30pm||USD||EIA Crude Oil Inventories||-3.495M||-12.633M|
|7:00pm||USD||Fed's Beige Book|
|1:30am||AUD||NAB Business Confidence QoQ (Q2)||7|
|2:30am||AUD||Unemployment Rate s.a. (Jun)||5.4%||5.4%|
|2:30am||AUD||Employment Change s.a. (Jun)||17K||12K|