FX Explained MacroWatch: w/c 01/07/19

Intermediate

Recap

  • A pulling back on the prior dovish shift from the mid-June Federal Open Market Committee Meeting (FOMC) Meeting, with US Federal Reserve (Fed) speakers last week attempt to subdue market expectations for more aggressive rate cuts (anticipation was rising for a 50bp cut on July).
  • This saw equity markets correct modestly lower, alongside Bonds, whilst the US Dollar posted a slight rebound, albeit a very shallow corrective bounce.
  • On Saturday it was announced from Osaka, Japan, that Presidents Xi and Trump (of China and the US respectively) had agreed to a cessation of trade war escalations and for trade talks to resume.
  • On Sunday President Trump met North Korea’s leader Kim Jung Un in the Demilitarised Zone (DMZ) on the North/South border. He is the first serving US President to enter North Korea and the leaders agreed to recommence previously stalled nuclear talks.
  • The S&P 500, the US benchmark average, posted its best performance for June since 1955, PLUS the strongest H1 (first half year) since 1997!

Key this week

  • Manufacturing and Services Purchasing Manager Index (PMI)
  • US Employment Report
Date Key Macro Events
01/07/19 Manufacturing Purchasing Manager Index (PMI) – Global data releases
02/07/19 Reserve Bank of Austrasia (RBA) Meeting, rate decision and statement
03/07/19 Services Purchasing Manager Index (PMI) – Global data releases
04/07/19 US Independence Day – US Markets closed
05/07/19 US Employment Report: Non-Farm Payroll & Average Hourly Earnings

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