Economies

CPI Inflation accelerated 9.4% y/y in June as today’s data showed, aggravating cost-of-living fears, while the Pound consolidates it recent gains against the greenback

Oil has benefited from the recent dollar decline, with both UKOil (Brent) and USOil (WTI) CFDs moving into the neutral areas between their blue bands (green rectangles).

Inflation is still in focus as the US printed at 9.1% - the fastest pace since 1981. Bank of Canada surprises with 100bps to front load hikes due to inflationary concerns. Waller and Bullard talk down hike expectation to 75bps from 100bps. Fed funds rate has 75bps at 70% for 27 July hike. Bank earnings disappoint; this week, NFLX and Tesla kick off the tech side. Housing data is in…

Retail sales increase on a nominal basis but slow on a real basis.

US CPI Inflation hit new four decade high in June, as Wednesday’s data showed, sparking aggressive market expectations for another outsized move on rates by the US central bank

A policy cannot deal with the supply shocks impacting the economy. Market participants are aware of this and will continue looking for a return commensurate with the heightened risk. In this environment of uncertainty, the price is still adjusting. Thus it seems, for the time being, they may have settled on "cash is king."

NFP came in better than expected, albeit trending down. Other data hints at cracks forming in the job market. FXCM market specialists, Nik and Russ, discuss this further. The yield curve remains inverted and is in danger of steeper inversion as the Fed continues with its aggressiveness. Wednesday sees the CPI release, with markets forecasting a higher headline number than previous. RBNZ and BoC also feature on the calendar. Shifting…

The NFP print surprised to the upside. However, there are still some worrying signs.

Today's claims data shows degradation in the jobs market.

Oil capitulates as market ponders demand destruction.

Last week saw quarterly GDP contracts and PCE show signs of moderation. Moreover, manufacturing missed its forecast. All of a sudden, the narrative focuses on recession. Nik and Russ discuss if the Fed's focus will change in Q3. The RBA looks to deliver further hikes, and Wednesday sees the release of the FOMC's minutes from its June meeting.