Fed Powell's Testimony puts the USD in the Spotlight

Daily Update - 17th July 2018

Yesterday’s Market

•             CNY GDP

•             US Retail Sales & Trump-Putin Meeting

Yesterday’s Focus

China's economy grows 6.7% in second quarter, but weak June industrial production readings suggest second-half could see slowing. Oil dips as investors bet Libya supply will start to Increase, but Norwegian strikes keep investors from extending bets.

Russian President Vladimir Putin and his US counterpart Donald Trump have met in the Finnish capital Helsinki to talk about "everything from trade to military to missiles to China".

Putin told Trump at the start of their summit on Monday that "the time has come to talk thoroughly about bilateral relations, as well as various hotspots in the world".

For his part, Trump first congratulated Putin with the successful organization of "one of the best World Cups of all times".

He said their discussions would involve trade, the military, missiles, nuclear weapons and China, including their "mutual friend" China's Xi Jinping.

Trump also said that "getting along with Russia is a good thing, not a bad thing".

"Frankly, we have not been getting along for the last number of years. And I really think the world wants to see us get along. We are the two great nuclear powers," he said.

 

Today's Market

•             NZD Consumer Price Index

•             GBP Average Earnings Including Bonus & Claimant Count Change

•             US Fed Powell’s Speech & Industrial Production

Today’s Focus

Federal Reserve Chairman Jerome Powell will defend the current pace of one interest-rate hike per quarter. 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. Powell is likely to be sympathetic to lawmakers who express to this concern, she noted. The Fed chairman has already indicated he thinks there may be more benefits to the economy with unemployment rate so low.

The Fed’s formal monetary policy report, released late last week, was optimistic that more prime-age men may join the workforce.