The Federal Reserve surprised investors this week with its decision that was seen as hawkish. Gold and stocks moved lower while the US dollar strengthened. Investors may be offered an update next week as a number of Fed members are scheduled to speak. Apart from that, flash release of PMI indices for June will also draw markets' attention. Be sure to watch GOLD, DE30 and GBPUSD next week!
FOMC surprised markets this week with a hawkish tilt. The US dollar rallied in response and gold plunged below the $1,800 mark. Precious metals may remain active next week amid an avalanche of speeches from Fed members. Investors are eager to know whether adjustments to the IOER rate were technical in nature or was it a hint that the Fed began to consider tightening. Monday and Thursday are days with the largest number of speeches scheduled - 3 and 4, respectively. Moreover, Chairman Powell will appear before the House Committee on Tuesday to discuss pandemic programmes.
German DE30 reached a fresh all-time high in the 15,800 pts area at the beginning of this week. However, the index began to underperform later on, following the FOMC meeting that was seen as a hawkish tilt. European equities may get a chance to recover on Wednesday when a set of flash PMI indices for June will be released. Slightly weaker manufacturing print and improvement in the services sector are expected. French and German readings at 8:15 am BST and 8:30 am BST, respectively, will be most closely watched.
GBPUSD dropped this week, mostly on the back of USD strengthening. The pair will get a chance to move next week as the Bank of England is set to announce a monetary policy decision (Thursday, 12:00 pm BST). Markets do not see any adjustments to rates or QE programme but there is expectation that, just as it was the case with the FOMC meeting, the number of hawks in BoE may increase. Pound may also experience elevated volatility on Wednesday, when PMIs for June are released (9:30 am BST).
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