Minutes from the Federal Reserve's latest meeting are set to dominate the FX and bond calendar in the week starting July 6, as traders hunt for clues on whether U.S. rates will rise. The European Central Bank's June accounts land the same week, keeping EUR/USD squarely in play near 1.1436.
Wednesday's release of the Fed minutes is likely to be the highlight of the coming week's economic calendar for currency and bond markets, as investors look for further clues on whether and when U.S. interest rates could rise. The record covers the first meeting under new Fed Chair Kevin Warsh, where rates were left unchanged at between 3.5% and 3.75%.
The Fed's statement and projections suggested rates could increase to counter rising inflation, and Warsh has stressed the importance of tackling it. But Warsh later said his first weeks in the job have seen risks of higher inflation recede amid easing tensions in the Middle East.
The jobs data complicate that picture. U.S. employers added just 57,000 jobs in June, far weaker than expected, even as the unemployment rate edged lower. As a result, money markets fully price a 25 basis-point rate increase in December, with a sizeable risk of an earlier move in October, according to LSEG data.
On the other side of the pair, the ECB releases the accounts of its June meeting on Thursday, when it raised interest rates by 25 basis points, bringing the key deposit rate to 2.25%. German and French final inflation figures for June follow on Friday.
Nicola Nobile, chief Italy economist at Oxford Economics, said the eurozone economy looks to be stabilizing after the Iran-related shock, though he noted underlying momentum remains modest. Lindsay James, investment strategist at Quilter, said there is a possibility that hikes might not materialize given easing price pressures and some jobs-market weakness.
Source: MarketScreener
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