Today’s focus is on the outcome and statement of the FOMC meeting, as well as the press conference by Fed Chair Powell. The market is anticipating that the recent slowdown in the growth of US Consumer Price Index and Producer Price Index may halt further rate hikes in this FOMC meeting. However, it’s important to keep in mind that inflation is still above the target of 2%, and there could be implications for additional rate hikes depending on the situation. The 25 basis points rate hike in this meeting is already priced into the market, and attention will be on Powell’s press conference.
In the London and European markets, the French Consumer Confidence (July) and Eurozone M3 Money Supply (June) will be released. However, market reactions are likely to be limited ahead of the FOMC.
In terms of other events, the Japanese government will release the monthly economic report (July), and the US weekly petroleum inventories will be published. The Bank of Canada meeting minutes (from July 12th meeting) will also be released, and the US will conduct a 2-year floating-rate note auction of $240 billion.
The main focus today will be the reaction in the NY market following the FOMC outcome and Powell’s press conference. So far, the dollar has been on an upward trend. Additionally, the US stock market has been performing well with the Dow Jones Industrial Average achieving a 12-day winning streak due to strong corporate earnings. After major events like the FOMC, the market often experiences adjustments in the recent trend. However, it remains to be seen how things will play out.
As of now, the expectation is for the USD to continue in a selling trend. The market is likely to remain in a range until the FOMC meeting passes and a major trend emerges.