Following market turmoil at the start of last week, a sense of calm was restored after weekly US jobs data came in better than forecast, helping markets regain some of their losses. Earlier calls for an emergency Fed rate cut dissipated, with interest rate markets now tempering their expectations of a 0.50% cut at the next FOMC meeting down to 50% from 100%.
This week could prove pivotal to the next UK and US monetary policy moves as a barrage of key Tier 1 economic data is slated for release. US year-on-year inflation data is expected to ease slightly, and headline Monthly Retail Sales are forecast to rebound from the prior month’s flat reading.
In the UK, the Unemployment Rate is forecast for a slight increase, whilst the Headline Inflation rate is expected to increase to 2.3% versus the prior month’s reading of 2%.
*Daily move - against G10 rates at 7:30am, 12.08.24
** Indicative rates - interbank rates at 7:30am, 12.08.24
Market turmoil could be rekindled this week as we look to the latest release of the US inflation report due Wednesday and Retail Sales slated for Thursday. With increasing fears of an imminent US recession, sticky inflation and a weaker Retail Sales report could send equity markets lower once again and increase the chances of a 50bps interest rate cut at the next Fed meeting.
Over in the UK, key economic data is scheduled for release, including the latest read on Employment, Inflation and Retail Sales. Elsewhere, US politics continues to see Kamala Harris gain ground on Donald Trump in the race to the White House. The latest opinion polls show the Democrats ahead in key swing states.
Geopolitics continue to rile markets, with the Israeli defence minister telling the US that Iran is preparing for a large-scale attack on Israel. This prompted the Pentagon to announce they have ordered the deployment of US Strike groups to the region.
Our team of currency experts are here to help you get more from your money when making an international payment. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Over the last 19 years we’ve helped over a million customers and last year alone processed over £12bn. We’re tried and trusted, and we’re ready to help you.
Have a great day.
