FX Explained MacroWatch: w/c 08/07/19

Intermediate

Recap

  • Markets reaction to the G20 Meeting in Japan and agreement for the reopening of trade talks between the China and US.
  • Global asset classes went into a “risk on” phase, with equity markets higher, global indices hitting at least multi-month peaks with the major US stock averages achieving new record highs.
  • Risk/ Commodity currencies” (Australian, New Zealand and Canadian Dollars) continued their solid rallies from June into early July, echoing traders and investors better risk appetite.
  • The non-Farm Payroll (NFP) section of the US Employment report beat expectations (which were around 150K jobs to be added in June) posting at 224K.
  • This produced solid advances for the US Dollar against major currencies and initially sent equity markets lower, which subsequently bounced for a solid end to the week.
  • This price action has reflected market expectations of possibly a less dovish (de facto more hawkish) US Federal Reserve.

Key this week

Powell
  • Tuesday 9th July – Fed’s Powell speaks
  • Wednesday 10th July – Bank of Canada Rate Decision, Fed’s Powell testifies before Congress
  • Thursday 11th July – US CPI, Fed’s Powell testifies before Congress
Date Key Macroeconomic Events
08/07/19 German Industrial Production
09/07/19 Fed Chairman Powell speaks; RBNZ Governor Orr speaks
10/07/19 China CPI; UK GDP; Bank of Canada Rate Decision; Fed’s Powell testifies before Congress
11/07/19 German CPI; US CPI; Fed’s Powell testifies before Congress
12/07/19 China Trade report

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