Forex Fundamental News Today for July 19th, 2024
Forex Fundamental News Today:
Quick Facts
- Bond Traders Boost Holdings Amid #Inflation Concerns
- “Harrisonomics”: Strengthening America’s Middle Class
- #WallStreet Awaits #Powell’s Rate Cut Announcement
- Fed’s Daly Warns of Unintended Consequences from Policy Mismatch
- Israel and Hamas at an Impasse Over Cease-Fire Terms
- U.S. Consumer Confidence Steady as Election Approaches
- #FOMC Officials Signal Imminent Rate Cuts
- Global #Inflation and #CentralBank Meetings in Focus
News Details
- Bond Traders Boost Holdings Amid #Inflation Concerns:
As investors grow more confident that inflation is under control, some are taking defensive steps to protect themselves from a potential spike in inflation. These fund managers are increasing their bond holdings to secure returns in case of an inflation surge. Wall Street strategists suggest leveraging the decline in future inflation indicators to build these positions. While rate cuts seem likely, and recession concerns are on the rise, some believe that the drop in bond yields may have gone too far. John Bilton of J.P. Morgan Asset Management remains neutral on interest-rate risk but acknowledges potential inflationary pressures.
- “Harrisonomics”: Strengthening America’s Middle Class:
U.S. Vice President Kamala Harris introduced her “Opportunity Economy” plan, aiming to bolster the middle class. The plan includes tax cuts for most Americans, banning price gouging at grocery stores, and building affordable housing. In her first major economic speech as the Democratic presidential nominee, Harris proposed a new child tax credit, tax cuts for families with children, and lower prescription drug costs. She also called for the construction of 3 million new homes and offered tax incentives for home builders, emphasizing that a strong middle class is key to a strong America.
- #WallStreet Awaits #Powell’s Rate Cut Announcement:
Wall Street is eagerly awaiting Federal Reserve Chair Jerome Powell’s confirmation of an upcoming rate cut at the Jackson Hole Symposium. The focus is now on how much the cut will be, with stock traders possibly disappointed if Powell remains vague. Eric Beiley of Steward Partners Global Advisory noted that the market expects rate cuts to begin in September, but Powell’s cautious approach could lead to surprises if he doesn’t confirm this timeline. Global equities have been rising, with the MSCI World Index nearing its mid-July peak, and the VIX dropping below 15.
- Fed’s Daly Warns of Unintended Consequences from Policy Mismatch:
FOMC member Mary Daly warned against over-tightening monetary policy as the economy slows, which could stabilize prices but destabilize the labor market. Her views align with those of Atlanta Fed President Raphael Bostic, who highlighted the risks of delaying rate cuts. Daly expressed confidence that inflation is under control and suggested a gradual reduction in interest rates, likely by 25 basis points. Markets anticipate a rate cut in September, with ongoing debates about its size.
- Israel and Hamas at an Impasse Over Cease-Fire Terms:
Ceasefire negotiations for the Gaza Strip continued in Doha, involving Qatar, Egypt, and the U.S. Despite some progress, disagreements persist over Israeli military control of key corridors within Gaza. A Hamas official stated that the transitional proposal did not align with the earlier ceasefire agreement, and the new conditions proposed by Israel were rejected.
- U.S. Consumer Confidence Steady as Election Approaches:
The University of Michigan’s preliminary reading on consumer sentiment remained stable at 67.8 in August. One-year inflation expectations are at 2.9%, while five-year expectations are at 3%. The index has been nearly flat for four months, with a slight improvement in personal finances and the five-year economic outlook. As the presidential campaign progresses, consumer expectations may shift, with 41% currently favoring Harris for the economy, compared to 38% for Trump.
- #FOMC Officials Signal Imminent Rate Cuts:
Key Federal Reserve officials, including Mary Daly, Alberto Musalem, and Austan Goolsbee, have indicated that inflation is steadily approaching the 2% target. They suggest that it may soon be time to adjust the current moderately restrictive monetary policy. Daly emphasized that while the U.S. labor market is slowing, it is not weak, and warned of the dangers of not aligning monetary policy with inflation and economic growth.
- Global #Inflation and #CentralBank Meetings in Focus:
The Federal Reserve’s potential rate cuts in September will depend on the minutes from July’s FOMC meeting and the Jackson Hole symposium. The recent U.S. CPI and PMI data indicate easing inflation, raising expectations for a rate cut. Central bank policies are seen as favorable for market returns, and August’s flash PMI data, to be released on Thursday, will provide early insights into economic conditions ahead of the September FOMC meeting. Economists are also closely watching Eurozone inflation data for indications of further rate cuts by the European Central Bank (ECB).
Upcoming Economic Data and Events: Forex Fundamental News
- Mon 19/08: 7:15pm USD FOMC Member Waller Speaks
- Tue 20/08: 7:15am CNY 1-y & 5-yr Loan Prime Rate
- Tue 20/08: 7:30am AUD Monetary Policy Meeting Minutes
- Tue 20/08: 6:30pm CAD CPI m/m
- Tue 20/08: Tentative NZD GDT Price Index
- Wed 21/08: 8:30pm USD Crude Oil Inventories
- Thu 22/08: 12:00am USD FOMC Meeting Minutes
- Thu 22/08: 2:00pm EUR Flash Manufacturing & Services PMI
- Thu 22/08: 2:30pm GBP Flash Manufacturing & Services PMI
- Thu 22/08: 6:30pm USD Unemployment Claims
- Thu 22/08: 7:45pm USD Flash Manufacturing PMI
- Thu 22/08: 8:30pm USD Natural Gas Storage
- Fri 23/08: 6:30pm CAD Core Retail Sales m/m
- Fri 23/08: 8:00pm USD Fed Chair Powell Speaks
- Fri 23/08: Day 2 All Jackson Hole Symposium
Note: All times are in GMT +6.
Sources: #CNBC, #Bloomberg, #Reuters, #YahooFinance, #CNN, etc.
Prepared for you by “Akif Matin”
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