EUROPEAN SESSION
In the European session, we don’t have anything on the agenda so the price action will likely remain rangebound or the pullbacks that started during the Asian session extend further into the American session. We might also hear from a couple of ECB policymakers but the consensus is now to hold rates steady in July and delivering another rate hike in September if needed.
AMERICAN SESSION
In the American session, we get the Canadian CPI report. The most important metric is the Trimmed-Mean CPI Y/Y which is expected to remain unchanged at 2.0%. The BoC left interest rates unchanged as expected at the last meeting and stated that it was seeing limited evidence that higher energy prices were fuelling broad-based inflation.
The BoC said that it will continue to look through the short-term impact of energy price shock on headline inflation but will not let higher energy prices become persistent inflation. So, if higher energy prices lead to generalized inflation they may consider “consecutive rises in the policy rate”. The market is pricing in just 21 bps of tightening this year which translates in a 66% chance of a rate hike in December at the earliest.
CENTRAL BANK SPEAKERS:
- 09:00 GMT/05:00 ET – ECB’s Kocher (neutral – voter)
- 13:00 GMT/09:00 ET – ECB President Lagarde (neutral – voter)
- 13:00 GMT/09:00 ET – Fed’s Waller (neutral – voter)
- 17:15 GMT/13:15 ET – ECB President Lagarde (neutral – voter)
This article was written by Giuseppe Dellamotta at investinglive.com.
