Week’s Focus: FOMC Meeting Minutes, NFP Data and UK Election

Week's Focus: FOMC Meeting Minutes, NFP Data and UK Election

Federal Reserve Chairman Jerome Powell’s comments and minutes of the latest FOMC meeting will be closely watched this week. While the NFP numbers for US jobs will attract attention. In addition, French and British elections keep the market buoyant

The key data and events for this week

Tuesday – Eurozone Inflation, Fed comments

  • The Eurozone is to release June inflation data on Tuesday, with a anticipation of a slight slowdown in both the headline and underlying measures after an uptick in May. Core CPI Flash Estimate y/y is foreseen at 2.8% from previous 2.9%, while CPI Flash Estimate y/y at 2.5% from previous 2.6%.
  • Though the ECB began hiking interest rates later, the June cut put it ahead of the Fed on its march lower, as the world’s largest central bank remains stymied by above target inflation.
  • On the same day, Fed President Jerome Powell will speak at the European Central Bank’s annual forum in Sintra, Portugal.
  • The ECB is to publish the minutes of its June meeting, when it cut interest rates for the first time since September 2019, on Thursday.
  • Powell and ECB President Christine Lagarde will participate in a panel discussion on “Monetary Policy in an Era of Transition,” where investors will look for new insights into the future of interest rates.
  • Inflation is slowing after rising in the first quarter, but remains above the Fed’s 2 percent target.
  • Further, US JOLTS Job Openings is released. The number is forecast to be 7.86M, down slightly from 8.06M previously, which could weigh on the dollar. All eyes are now fixated on the FOMC meeting minutes.

Wednesday – FOMC meeting minutes

  • US ADP Non-Farm Employment Change and ISM Services PMI is scheduled to release. The number is foreseen at 156k moderate higher from previous 152k. While, Service PMI is expected to reduce by 52.5 from previous 53.8.
  • The US Unemployment Claims to be next release for the day. The data is expected to jump by 235K after a strong increase of 233K. This could have a negative impact on the value of the dollar.
  • Further, FOMC meeting minutes of the June meeting will be parsed for the central bank’s view of the economic outlook and the factors influencing the monetary policy outlook.

Thursday – UK Parliamentary Elections

  • The polls predict a British election victory for the opposition Labor Party on Thursday, sending the pound back to levels not seen since the Brexit vote in 2016.
  • Traders see a return to stability after major political turmoil in under 14 years of Conservative government and speculated that Labor leader Keir Starmer could restore trade links with Europe. But it remains to be seen how big a majority Starmer can have in parliament.

Friday – US Nonfarm Payroll data

  • US Job numbers will be focusing their attention on Friday as they look for fresh indications on when the Federal Reserve might start to cut interest rates.
  • The data is foreseen at 189,000 jobs in June after a larger than forecast gain of 272,000 the previous month highlighted the resilience of the labor market.
  • The Fed kept rates unchanged earlier this month and pushed out the start of rate cuts to perhaps as late as December, as officials look for more convincing signs that inflation is pulling back to the central bank’s target, or evidence that the labor market is cooling.
  • Unemployment Rate is foreseen at 4.0% from previous 4.0%. Average Hourly Earnings m/m is foreseen at 0.3% from previous 0.4%.

Happy Trading!

Commodity Samachar
Learn and Trade with Ease

Also Read: Dollar Price Falls on PCE Data: Are Further Losses Ahead?, Nifty Bank Slips Despite Early Gains: Bulls Take a breather

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