US Indices: Something for Optimists

The US indices, S&P500 and Nasdaq100, closed Wednesday at record highs, taking a decisive step up, adding over 1.1% and 2%, respectively. The Dow Jones index lagged, adding just 0.25% for the day and is 3% off all-time highs. The Nasdaq-100 and S&P500 defended tops on Thursday, which seems more like a rest before rising rather than a downward reversal signal.

BoE Stays Quiet But Data Could Speak Volumes

Despite the fact that the BoE members’ public appearances are kept to a minimum, the BoE has not gone into hibernation. It remains vigilant and prepares for the key August 1 gathering. This meeting includes both the quarterly projections and a press conference to explain any likely rate change or prepare the ground for a move in September.

Fed Pivot Less Likely After Strong NFP, Focus on CPI Report and Dot Plot

After a run of consistently hot data on inflation and the economy all year, it briefly seemed like the tide was turning for early rate cut hopes. The last two sets of inflation readings were somewhat soft, while recent growth indicators have been a bit patchy. But the optimism didn’t last long as Friday’s nonfarm payrolls report threw a spanner in the works, dashing expectations that the long-anticipated Fed pivot could come as early as the June policy meeting.

ECB's Lagarde Clearly Stated One Should Not Expect Rate Cuts at Predetermined Pace

ECB’s Lagarde in an op-ed published this morning clearly stated one should not expect rate cuts at a predetermined pace. She didn’t exclude the possibility of having multiple meetings between one rate cut and another and vowed to keep policy restrictive (= policy rate above an increased (?!) neutral rate) for as long as needed.

GBP/USD Shrugs as UK Unemployment Rises, GDP Next

The British pound is drifting on Tuesday. GBP/USD is trading at 1.2720 in the European session at the time of writing, down 0.08% on the day. The UK released the May employment report earlier today. Next up is GDP on Wednesday, with a market estimate of 0% m/m for April, following a 0.4% gain in March.

Alarming UK Labour Market Data

Unexpected weakness in the UK labour market could signal an important turnaround in the economy and raise the urgency of monetary easing. The short-term impact on the Pound has been relatively limited, but the currency market has now adopted a wait-and-see approach ahead of Wednesday’s US news.

Key Factors Influencing AUDUSD: Analysis and Trading Scenarios

These factors create an environment where the strength of the USD and the monetary policies of both the RBA and the Fed are crucial in determining the movement of the AUDUSD pair.

Euro Under Pressure as Macron Calls Snap Election

The euro is down for a third straight day and has dropped 1.3% since Thursday. EUR/USD is trading at 1.0731 in the European session, down 0.32% on the day. There are no releases out of the US or the eurozone today.

Aussie Edges Lower as Business Confidence Slips

The Australian dollar has declined by 0.28% on Tuesday. AUD/USD is trading at 0.6600 in the European session, down 0.16% on the day. On the data calendar, Australian NAB business confidence was weak and there are no economic releases out of the US.

Nordic Outlook: Inflation Have Been Stronger Than Expected

This morning, we published our latest edition of Nordic Outlook in which we take a closer look at the major economies. We see that growth and inflation have been stronger than expected, pointing to fewer interest rates cuts delivered at a slower pace. In the Nordic countries the picture is more mixed, however the overall outlook remains for both higher growth and lower interest rates. Read more in Nordic Outlook - Warmer than expected, 4 June.