Solid UK jobs report gives August hike the green light

Despite a slip in UK wage growth, we suspect the Bank of England will remain comfortable with the overall trend. We expect a rate hike in August –  For the Bank of England, rising wage growth is a key pillar of its rate hike rationale. So at face value, the latest slip in average earnings (ex bonuses) to 2.7% may appear disappointing. However, it’s worth noting that, like last month’s fall, this is mainly a function of base effects. Wage growth was particularly weak in early 2017, but began to recover from the second quarter – meaning the year-on-year growth rates are beginning to ease. Admittedly the recent momentum has slipped a little too. But with Bank of England Agents still pointing to skill shortages resulting in more rapid pay increases, we doubt the recent figures will lead to any kind of rethink amongst the committee on the overall trend for wages. Read More @

Fed chairman expects rate hikes to continue

Federal Reserve Chairman Jerome Powell was optimistic in his economic assessment on Tuesday and told the Senate Banking Committee he expects the Fed to continue to gradually raise interest rates, at least “for now.” Mr. Powell cited low unemployment and inflation close to its 2% objective level as reasons for being positive. Those were two key reasons the central bank last month raised the federal funds rate for the second time in 2018, this time to a range of 1.75% to 2%. Read More @

Preview: Powell to defend pace of one interest-rate hike every three months

Federal Reserve Chairman Jerome Powell will defend the current pace of one interest-rate hike per quarter, economists said. “I think he’s been a stick-to-the-path kind of guy,” said Robert Brusca, chief economist at FAO Economics. Powell will testify to the Senate Banking Committee at 10 a.m. on Tuesday, followed by a second day with the House Financial Services panel on Wednesday. After raising rates in March and June, the Fed has penciled in two more interest-rate hikes this year. Markets expect the Fed to move in September and December. Read More @


USD regain ground after the FED remains Bullish towards the end of this year; rate hike is also in-tact for further rate hikes this year. Bullish flag has started and to or not to buy USD still remains cautious.


  1. 4.30pm – UK will release their CPI – expect huge volatility if the data don’t match the expectation. We stay neutral till after the news.
  2. 5.00pm – EURO will release their CPI and is expected to be no change. We stay neutral for EURO for now.
  3. 8.30pm – US will release their building permits which is their leading indicator. Expected to be good.
  4. 10.00pm – FED continues day 2 testifying – expected to be continued hawkish.
  5. 10.30pm – Crude Oil Inventories. Demand and Supply still a challenge and threat from Iran still remains. We remain neutral.

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