Headlines:

• Dollar stays in retreat mode so far on the session
• Equities pull higher in European morning trade
• What to expect from the ECB later today and how will the euro react?
• What are the key dates to watch before the next FOMC meeting in September?
• Germany August GfK consumer confidence -24.4 vs -24.7 expected
• UK July CBI retailing reported sales -25 vs -9 prior
• China tries to play down ‚malicious‘ hype on Qin Gang’s removal from minister post

Markets:

• NZD leads, USD lags on the day
• European equities higher; S&P 500 futures up 0.6%
• US 10-year yields up 1.8 bps to 3.868%
• Gold up 0.2% to $1,976.47
• WTI crude up 0.9% to $79.51
• Bitcoin down 0.3% to $29,481

The dollar was mildly lower in Asia but extended its post-FOMC losses in Europe today. Powell kept the door open for a September move but was not adamant about it and markets took that as a message that perhaps we have already seen a peak in interest rates in the US.

EUR/USD moved up from 1.1100 to 1.1150 and is holding just below that while GBP/USD pulled higher from 1.2940 to a high of 1.2995 but is now just marginally higher at 1.2960. The euro will be in focus with the ECB coming up next and the risks might be skewed to the downside for the single currency.

Anyway, the dollar is lower across the board with USD/CHF also dropping back below 0.8600 and AUD/USD held its early gains at around 0.8600 – up 0.6% since Asia amid a stronger Chinese yuan and better risk sentiment as well.

Equities were solid throughout with European equities rebounding from yesterday’s setback, while tech shares are driving US futures higher. Nasdaq futures are up 1.2% currently and that tees up a more positive mood ahead of Wall Street later. The Dow looks poised for a record streak, after matching 13 straight days of gains already – first since 1987.

It’s now over to Lagarde & co. to deliver the next part of the central bank bonanza this week, before the BOJ wraps things up tomorrow.

This article was written by Justin Low at www.forexlive.com.

The Fed hiked interest rates by 25 bps yesterday as expected and left the
policy statement unchanged. The market wanted to see if Fed Chair Powell could
offer some hints on their next moves, but unfortunately, he just repeated that
they are data dependent and that all options are on the table for the September
meeting.

Conversely, the UK CPI last week missed expectations across the board
and triggered a big repricing in interest rates expectations. In fact, the
market was pricing a higher chance of a 50 bps hike prior to the report given
the higher wages data in the previous UK employment report. Now, the market sees a higher
chance that the BoE hikes by 25 bps at the upcoming meeting.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the price has
bounced on the previous swing high resistance turned support where we
had also the confluence with the red 21 moving average which
continues to be a great dynamic support. If this is the start of another rally,
the target should be the 1.33 handle.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we had also
the 61.8% Fibonacci retracement level
near the 1.2847 support. The
market structure now is bullish as the price keeps printing higher highs and
higher lows and the moving averages are crossed to the upside.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
already had signs of a possible pullback or reversal as the price was diverging with
the MACD
falling into the support zone. In fact, that’s a sign of weakening momentum and
we saw the sellers folding as the buyers outplayed them. The price is now
breaking above a key resistance level and the buyers should pile in even more
aggressively to target the 1.33 handle. The sellers, on the other hand, will
want to see the breakout failing and the price falling below the black trendline to
pile in and target a break below the 1.2847 support area.

Upcoming Events

Today the market will
focus on the US Jobless Claims data as the labour market strength is what keeps
the Fed on the hawkish side. A big beat should give the USD a tailwind, while a
big miss should weaken it even more. Tomorrow, the market will switch its
attention to the US PCE and ECI reports with the wages data likely to be more important.

This article was written by FL Contributors at www.forexlive.com.

Stunning display of vulnerability: Mitch McConnell suffers paralysis during press event? Igniting firestorm over his competence.

The debate about the need for term limits, age limits, and cognitive testing for politicians has reignited following a health scare involving a senior Republican legislator. The controversy is fueled by strong sentiments across party lines, with both Democrats and Republicans calling for significant reform. It highlights the irony of certain age-related criticisms levelled against politicians from opposing parties, and points to a shared concern about elderly legislators‘ ability to make critical decisions for the nation. The incident also raises questions about the extent to which these individuals can, or should, continue serving in high-stress roles.

Top 10 comments after Mitch McConnell freezes at a press conference

In a digital age of anonymous and readily available public commentary, the discussions around age and political capacity are only heating up. Here are the top 10 most controversial comments on the topic from recent online discussions.

1. Collinsje5 sparked controversy with a comment about being a lifelong Democrat and advocating for the retirement of older members of Congress in favor of younger, forward-looking legislators.

2. Mikeadams8708, a self-identified Republican, echoed the sentiment, calling for term and age limits for Congress, stating, „At least half of Congress is too old, and Americans are getting fleeced.“

3. Richard3793 offered a bipartisan take, agreeing that figures from both sides, including Diane Feinstein, need to step down before their terms end, calling it „the best example of term limits.“

4. RandomPlaylist took a more pointed stance, citing Mitch McConnell’s stance on healthcare as evidence of his lack of empathy, a statement that resonated with many.

5. Markmiranda9461 further reinforced the necessity of term limits, stating that older individuals who can’t take care of themselves shouldn’t be in power.

6. Ericw7381 went a step further by advocating for cognitive testing for older politicians, reinforcing the call for term limits.

7. MeisterJager90 compared the mandatory retirement age for airline pilots to politicians, stating, „the people flying this country are allowed to rot behind the podium,“ a sentiment that sparked intense debate.

8. DistrustHumanz brought voter responsibility into the discussion, arguing that citizens who continue to elect older politicians are to blame.

9. Bibit3856 suggested the implementation of term limits for Congress and Supreme Court members, broadening the debate to include all branches of government.

10. Chargrams9906 emphasized that age should be a significant factor when electing officials, arguing that aged senators and congress people shouldn’t be making life-changing decisions.

These comments highlight the growing public frustration over what many perceive as an overly aged political landscape. The clamor for term limits, cognitive testing, and younger, more dynamic leadership points to a potentially pivotal shift in the public’s expectations for their elected officials. The age factor, as it seems, has become a major talking point in the ongoing conversation about political reform.

ForexLive.com wishes good health to all.

This article was written by ForexLive at www.forexlive.com.

The ECB already pre-committed to a 25 bps rate hike today and they will certainly deliver on that. There will be no surprises on that front and markets have already fully priced in such a move. As such, the decision in itself isn’t what is going to be what traders will be reacting to. Instead, it is about the communication for the September meeting.

So, what can we expect from the ECB on that front?

I’ve mentioned already in a few posts earlier and I will say it again. I would not hold high hopes for the ECB to suggest that a rate hike in September is the most likely decision that they are leaning towards. And by ECB, I mean Lagarde’s press conference later.

There might be reports coming out after the decision which could signal some conflict about being more explicit but don’t expect that to be the case when Lagarde is putting it all out on the line later today.

She should just reaffirm that there have been positive developments on inflation and that they are going to be more data dependent after the summer. I mean, it’s only prudent to do so after having seen the abysmal PMI data for July and also loan demand being crushed amid a looming credit crunch.

As such, there is reason for the ECB to step back and perhaps monitor the situation in the weeks/months ahead.

The more hawkish members will certainly feel compelled to talk up the possibility of a rate hike but if the June to July period is any indication, they may have their hands tied to explicitly make such a call.

And if so, I reckon the euro may be in for a bit more of a disappointment in reaction to the ECB later. Looking at money market pricing, there is roughly 45 bps worth of rate hikes priced in for today and September. That indicates that on the balance of things, there is more potential for a downside shift in pricing rather than any upside extension.

However, if Lagarde comes on strong about their conviction to battle inflation and brushes aside the recent economic concerns, that might still spark a tentative rally in the euro. Although I would say that the scope for gains would be quite limited.

This article was written by Justin Low at www.forexlive.com.

• Prior -9

That’s a worrying sign as UK retail sales fell at its fastest pace since April last year. Adding to the woes is that stores are bracing themselves for worse times ahead, with many chains reportedly cutting orders placed with suppliers. Of note, the expectations for the month ahead reading fell to -32 from 0 previously, marking the lowest reading since March 2021. It’s not the biggest of data points but this is one that is an indicator of sentiment and what is to come, and it isn’t looking good for the UK and the pound.

This article was written by Justin Low at www.forexlive.com.