Will the BoE lay the groundwork for August hike?

Was recent data enough to ease concerns about first quarter downturn?

The Bank of England meeting on Thursday should be another interesting affair following a week in which two other major central banks – the Federal Reserve and ECB – have announced new tightening measures.

  • No rate hike expected this month
  • Markets still not convinced about August
  • Sterling could respond positively to hike clues

The BoE was close to doing the same in May and had it not been for a slowdown in the first quarter, it may well have raised interest rates by 25 basis points, taking them above 0.5% for the first time since March 2009. Read More @ https://www.marketpulse.com/20180620/will-boe-lay-groundwork-august-hike/

Fed’s Powell says U.S. economy not on verge of repeating 1970s inflation

The U.S. economy is not on the verge of repeating the outbreak of inflation last seen in the 1970s, despite the obvious parallel of tight labor markets, said Federal Reserve Chairman Jerome Powell on Wednesday.

The labor market is now as strong as it has been in 50 years. In May, the U.S. unemployment rate fell to 3.8% and forecasts say it may break levels not seen since the 1960s.

Unemployment was below 4% from February 1966 through January 1970. During that time, inflation as measured by the price index for personal consumption expenditures, increased from below 2% in 1965 to about 5% in 1970. Read More @ https://www.marketwatch.com/story/powell-says-us-economy-not-on-verge-of-repeating-the-inflation-of-the-1970s-2018-06-20

Sovereign Debt Writedowns Draw Closer in Franco-German Plan

France and Germany want to make it easier to restructure bonds of euro-area nations that get into trouble.

A joint proposal, released Tuesday, envisages the start of talks on strengthening collective action clauses, which have been mandatory for sovereign bonds issued by euro-area states since 2013. The new procedure would kick in when a member of the currency bloc seeks financial assistance from its crisis-fighting fund.

Rules currently in place allow repayment modifications if the terms are approved by two sets of majorities. Holders of all the affected bonds voting together must approve changes, as must holders of each bond series separately. Replacing this cumbersome “two-limb” voting procedure with a single-limb aggregation clause requiring a single vote by holders of the affected bonds would make it harder for holdouts to resist debt restructuring attempts when the majority of investors concedes that it’s necessary. Read More @ https://www.bloombergquint.com/onweb/2018/06/20/sovereign-debt-restructuring-draws-closer-in-franco-german-plan

WHAT IS THE USD INDEX SAYING?

USD Struggles to break the Triple Top. We believe a good pullback this week before it moves to new highs. Jerome Powell is very confident of the economy moving forward. @ https://www.marketwatch.com/story/powell-says-us-economy-not-on-verge-of-repeating-the-inflation-of-the-1970s-2018-06-20

TODAYS NEWS THAT MIGHT AFFECT YOUR TECHNICAL TRADES

  1. 9.30 – AUD will be back again with their RBA Bulletin – Tends to have a mild impact since much of the information is released previously. Source changed release frequency from monthly to quarterly as of Mar 2010.
  2. 4.30pm – SNB will release their Press conference and we are expecting the CHF to strengthen moving forward.
  3. ALL DAY EURO GROUP MEETING – EURO may just jump anytime and volatile – be cautious.
  4. 5.45pm – Weidmann speaks and we expect some good volatility on the EURO.
  5. 7.00pm – UK will go to action with the press conference and rate decision. We are expecting the GBP to rally.
  6. 8.30pm – Canada will release their employment rate and is expected to be good; CAD have reached an oversold position. Looks good and is time to BUY.
  7. 8.30pm – US will release their Philly MFG data – expected to be weak.
  8. 10.00pm – EURO will release their Consumer confidence – EURO expected to mee upwards.

Overall the market is still fragile – maintain good money management at all times.

High Risk Investment Warning:

Please note that Forex and other leveraged trading involves significant risk of loss, It is not suitable for all traders and you should make sure you understand the risks involved, it is recommended that you seek an independent advice, if necessary.

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