FX Explained MacroWatch: w/c 15/07/19

Intermediate

Recap

  • On Wednesday the Fed Chairman Jerome Powell testified before Congress, continuing the dovish tone seen from June, as markets were looking for and had mostly discounted, though three was also apprehension that the tone could be less dovish in the wake of the robust June US Employment report, published in early July.
  • The Chairman once more highlighted a lack of US inflationary pressures and economic headwinds globally, which was then reinforced by various Fed speakers later in the week.
  • The market continues to anticipate a US interest rate cut at Meeting at the end of July, with possibility a 50bp cut, with further interest rate cuts expected this year.
  • In the Forex markets the US Dollar endured a broad selloff, with the US currency weakening versus all major currencies after Jerome Powell’s testimony.
  • The dovish Fed tone also sent the major US stock indices higher with the Nasdaq 100, Dow Jones Industrial Average and benchmark S&P 500 and all achieving new all-time highs in the past week.

Key this week

Date Key Macroeconomic Events
15/07/19 Chinese GDP
16/07/19 RBA Meeting Minutes; UK Employment report; US Retail Sales
17/07/19 UK Inflation report including key CPI; Canadian CPI
18/07/19 Australian Employment report
19/07/19 US Michigan Consumer Sentiment Index
Date Key Earnings Events Country
15/07/19 Citigroup US
16/07/19 J&J Goldman Sachs Wells Fargo JP Morgan Burberry US US US US UK
17/07/19 Bank of America Netflix IBM Severn Trent US US US UK
18/07/19 Microsoft Morgan Stanley United Health US US US
19/07/19 BlackRock American Express US US

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