At the ECB’s symposium in Sintra, Portugal, Fed Chair Powell was hawkish, looking to align markets with the latest dot-plot projection of another two interest rate hikes for this year. US final GDP printed significantly higher than preliminary indications. Headline PCE declined but the core number was sticky. This week, the US celebrates its Independence Day holiday, with the first two days having light liquidity. Wednesday sees the FOMC minutes…

The Federal Reserve’s preferred inflation gauge, the PCE shows contrasting trends between its headline number and the core print, which excludes volatile items such as food and energy.

Watch today’s US Open for insights on the hawkish comments by Fed Chair Powell, Australia’s inflation deceleration ahead of next week’s RBA meting and more

Watch today’s US Open for insights on the verbal Yen support by Japanese officials, which contains USD/JPY, hawkish commentary by ECB policymakers that send EUR/USD higher and more

Last week, Fed Chair Powell testified on Capitol Hill with a hawkish testimony, but it was the UK inflation print and BoE’s 50bps hike that got the markets attention. This week is the ECB Sintra Forum with Wednesday scheduling a key panel discussion. Inflation prints out of the US, Canda, Australia, and Eurozone will be keenly followed with final GDP numbers out of the US and UK towards the end…

Watch today’s US Open for insights on the forceful rate hike by the bank of England, Fed Chair Powell’s Congress testimony and more

Wednesday’s increase in core inflation forced the UK central bank to a more forceful 0.5% increase today and although it did not commit to more tightening, backing down looks very hard

UK inflation has come in higher than consensus. Headline CPI printed at 8.7%, higher than the 8.4% anticipated and core CPI was 7.1%, as opposed to the 6.8% expected. Headline inflation should decline over the next few months as base effects kick in. However, core inflation is likely to prove more resilient.

The ECB has lifted its main refinancing rate and deposit rate by 25bps to 4% and 3.5% respectively. This was in line with market expectations. The central bank is in on shaky ground given that the region is in technical recession. However, the ECB is firmly focusing on its fight against inflation. EU core inflation has shown signs of moderation lately (green arrow), but its rate of change (ROC) is…

The Federal Reserve (Fed) halted rate hikes yesterday, after 10 consecutive rate rises over 15 months. In effect, the Fed has chosen to evaluate the impact its rate rises are having. Nevertheless, it indicates that the central bank has made headway in addressing inflation.

The direction of CPI will give the Fed some room to breathe, and a pause is likely this month. A continuation in the trend will further please the Fed and make further hikes this year unlikely, as previous increases finally pass through the transmission mechanism.