Semi-annual testimonies of Fed Chair Powell in Congress turned out to largely be a non-event in terms of market volatility. However, the story was different for flash PMIs, especially from Europe, as big misses triggered a pullback on EUR and stock markets. The upcoming week will host some interesting events, including a panel discussion with heads of 3 major central banks (Fed, ECB and BoE). Be sure to watch EURUSD, GOLD and US100 in the week ahead!
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EURUSD remains under pressure but so far bulls failed to push the pair below the 1.035 area. The main currency pair will get a chance to move next week on release of inflation data from Europe and the United States. While flash CPI reading for June from the euro area will be released on Friday at 10:00 am BST, attention of EUR traders will be focused primarily on reading from Germany on Wednesday, 1:00 pm BST. When it comes to the United States, traders will be offered PCE inflation reading for May on Thursday, 1:30 pm BST.
Strong downward move on the gold market was halted in the first half of May and price of the precious metal started to see-saw around the 200-session moving average later on. Rapid policy tightening coupled with strong USD bars gold from launching a recovery move. However, precious metal also resists further drop. The next catalyst for a bigger move may surface on Wednesday as Fed Chair Powell, ECB President Lagarde and BoE Governor Bailey are all set to take part in a panel discussion at ECB event (2:00 pm BST).
Although the outlook for global equities did not change much over the past few days, indices from Wall Street managed to recover part of recent losses over the past 2 weeks. A drop in yields helped shore up market sentiment but risk of recession still looms large. Nasdaq-100 (US100) bounced off the 11,000 pts area in mid-June and has rallied 7% since. However, will these good moods prevail when economic data continues to deteriorate? CB consumer confidence for June (Tuesday, 3:00 pm BST) and ISM manufacturing index for June (Friday, 3:00 pm BST) will offer fresh hints on the moods next week.
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