The Federal Reserve delivered a 75 basis point rate hike this week, in-line with market expectations. However, the decision came before the US GDP report release that pointed to the second straight quarter of lower activity. Whether Powell was right saying that the jobs market remains strong will be put to test next week with the release of the NFP report for July. OPEC+ meeting and rate decision from RBA and BoE will also be on watch. Be sure to watch USDCAD, OIL and GBPAUD in the next week.
USDCAD
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appFed Chair Powell said that jobs gains remain robust when he justified the latest 75 basis point rate hike. This view will be put to the test this Friday at 1:30 pm BST when the US NFP report for July is released. Market expects the addition of just 250k jobs, which would be the lowest reading since November 2021. Any softer reading would put a big rate hike in September under question. USDCAD is likely to be volatile during release as Canadian jobs market report will also be released on Friday, 1:30 pm BST
OIL
Members of the OPEC+ cartel will meet this Thursday to discuss production levels for September. This will be the first meeting of oil producers following Biden's visit to the Middle East and will show whether the US President managed to persuade Gulf countries to boost oil output. However, as recession fears mount and outlook for oil demand weakens, the case for an output hike gets weaker and weaker. Oil managed to recover from recent lows but continues to trade at low levels compared to earlier months.
GBPAUD
While investors will have to wait until September for the next FOMC meeting, rate decisions from BoE (Thursday, 12:00 pm BST) and RBA (Tuesday, 5:30 am BST) will be announced next week. Both central banks are expected to deliver rate hikes this week and in both cases market expectations are split between 25 and 50 basis point moves. As such, there is a scope for rate surprise. However, markets will likely focus on forward guidance and whether the RBA and BoE sees signs of recession.
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
