Good morning
A slight negative tone in Asian markets overnight with most indices in the red on concerns the global economy is slowing. EURUSD holds around 1.0200 and GBPUS clinging on to 1.2000 as we start the last week of July. A very light economic calendar today suggests we could be in for rangebound trading. Markets digest Draghi’s resignation and the potential political unrest in Italy, while Lagarde says the rate rise last week was just the latest step in the unwinding of special measures, and they will continue to raise rates in order to bring inflation down.
Other than concerns over the economy, there are other reasons for the negative sentiment. Russia, health and China all combining to remind us that the world isn’t a splendid place right now. That’s before we look at the heatwaves that are causing fires and associated chaos across the globe.
No sooner had Russia and Ukraine reached a deal to export grain, it was reported that Russia had hit the Odesa port with a missile strike. I, together with the vast majority of people, watch Russian actions with some amazement that they really do seem to believe some of the nonsense they say and do.
China making some worrying noises over Taiwan as Pelosi plans to visit, China clearly unhappy with the plans, they have been making negative comments over the past week or so about the pending visit but their warnings over the visit are getting stronger.
As if Covid wasn’t enough, the WHO declared Monkeypox an emergency of international concern. I’m sure they were going to find a new name for it, but guess we’ll stick with Monkeypox for the time being.
It might be a light calendar today but we have some big announcements due later in the week, FOMC rate meeting Wednesday obviously the highlight where a 75bps rate rise is on the cards, while US GDP follows on Thursday, EU GDP Friday. Aussie inflation and retail sales through the week, various other bits and pieces also out to keep us on our toes. BoJ minutes due tonight, be interesting to see whether they, as one of the few central banks who are not talking tightening, are still happy with their loose monetary policy.
- 09.00 German IFO
- 13.30 US Chicago fed national activity survey
- 00.50 BoJ minutes
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