• As long as disinflation path converges to 2% before end of 2025, then I’m comfortable with gradual policy easing.

There is nothing new here. The market sees a 100% chance of a cut in September and a total of 64 bps of easing by year-end.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Things to look out for in today’s Consumer Confidence data
• Lavrov condemns Ukraine’s demands and warns West against ‚playing with fire‘
• UK CBI Distributive Trades -27 vs -43 prior
• Markets still leaning mostly risk on as we head deeper into the session
• UK PM Starmer warns of ‚painful‘ October budget,
• Two Libyan oilfields shut and another at lowest output
• BofA is bulilsh on the AUD due to differentials and a weaker USD
• UBS hikes US recession odds to 25% from prior 20%
• Today’s FX option expiry levels for the NY cut
• EURUSD has been following yield differentials higher
• What are the main events for today?
• Equity futures mostly green across the board this morning
• German detailed YY GDP 0.0% vs -0.1% expected
• German Consumer sentiment -22 vs -18.2 expected
• Swedish PPI YY for July -0.1 vs 0.8% prior
• BofA likes the USD lower and GBP higher
• Goldman maintains recommendation to stay long GBPCHF
• Fed officials keep door to 50bp cuts open

Markets:

• GBP leads, USD lags on the day
• European equities flat; S&P 500 futures down 0.05%
• US 10-year yields up 3 bps to
  3.848%
• Gold
  down 0.30% to $2,510
• WTI
  crude down 0.57% to $76.98
• Bitcoin
  down 0.61% to $62,438

It was another
quiet session with no market moving data releases. The only notable news was
UK’s PM Starmer warning of “painful” budget in October which hints to tax
rises, although he promised not to raise them for working people.

In the
markets, there’s been very little movement. The most notable moves have been in
the bond market where long-term Treasury yields have been rising faster than
short-term ones. Although that could be just daily noise, it’s something to
keep an eye on as the Fed cuts into a resilient economy (at least for now).

The focus
will now switch to the American session where the labour market data in the US
Consumer Confidence report will take the centre stage.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

With all the focus on the labour market right now, there are a few data points within today’s Consumer Confidence report that could get some attention and worth being aware of.

1. Jobs hard to find (overlaying this with the unemployment rate should explain why it’s useful and why it would matter going into next week’s jobs data).

2. Ratio between Jobs plentiful and jobs not so plentiful (a big drop in this one can get attention as well)

3. Ratio of Present situation versus forward expectations (this has in past cycles offered a fairly decent trigger or warning of slowdown conditions – but please keep in mind this has not been a regular cycle so pinch of salt, but the current macro context makes this interesting)

Unfortunately these aren’t part of the usual calendar release which is usually only the headline number, so it will require some digging in the report. But big surprises in these ones could get more attention today and worth keeping on the radar.

This article was written by Arno V Venter at www.forexlive.com.