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Abstract:The U.S. Conference Board reported a slight decline in the US Consumer Confidence Index (CCI) for June 2024, dropping to 100.4 from 101.3 in May. The Bank of Japan (BoJ) opted to keep its key short-term interest rate steady at 0.10% for June 2024, in line with market expectations. At its June 2024 meeting, the Federal Reserve decided to keep the federal funds rate unchanged at 5.50%. In June 2024, the Bank of England (BoE) decided to keep the interest rate at 5.25% unchanged. This decision...
The Week Ahead: Week of 29July(GMT+2)
Yen Resurgence! Will Next BoJ Week Sustain the Rally?
Tuesday, 30 July 2024, 16:00
US CB Consumer Confidence (Jul)
The U.S. Conference Board reported a slight decline in the US Consumer Confidence Index (CCI) for June 2024, dropping to 100.4 from 101.3 in May. This decline is primarily due to a fall in the Expectations Index, which decreased to 73.0 from 74.9. The reduction is largely attributed to ongoing concerns about future economic conditions, despite a robust labor market. Consumers are particularly worried about future income and business conditions, contributing to the lower Expectations Index. Additionally, inflationary pressures, particularly on food and groceries, continue to adversely affect consumers' economic outlook. Given the current situation, expectations for the next release are likely to remain near current levels, with a potential slight increase if inflation eases and the labor market remains strong.
Wednesday, 31 July 2024, 05:00
BoJ Interest Rate Decision
The Bank of Japan (BoJ) opted to keep its key short-term interest rate steady at 0.10% for June 2024, in line with market expectations. This decision reflects Japan's current economic conditions, with the BoJ noting moderate recovery alongside some weaknesses. Speculation about a potential rate hike has been growing, with sources suggesting that the decision in the next meeting could be a “close call” and that the central bank might announce a gradual tapering of bond purchases. Despite this, the BoJ have previously indicated its commitment to maintaining policies aimed at combating deflationary pressures, suggesting that accommodative monetary policy will continue in the near term.
Wednesday, 31 July 2024, 20:00
Fed Interest Rate Decision
At its June 2024 meeting, the Federal Reserve decided to keep the federal funds rate unchanged at 5.50%. This decision was influenced by recent economic data showing moderated inflation, though it is still above the 2% target, and a resilient labor market. There is speculation about a potential rate cut later in the year if economic conditions, such as inflation and employment figures, warrant further easing. However, the Fed is expected to maintain its current rate for now, with futures markets indicating over an 85% probability that rates will stay the same in July, but a likely rate cut by the fall.
Thursday, 1 August 2024, 13:00
BoE Interest Rate Decision (Aug)
In June 2024, the Bank of England (BoE) decided to keep the interest rate at 5.25% unchanged. This decision was driven by the need to keep inflation on a downward path towards the BoE's 2% target. Inflation in the UK has recently stabilized around 2%, a sharp decline from the 11.1% peak in October 2022. This stability has led to speculation that the BoE might begin lowering rates soon. However, the Monetary Policy Committee (MPC) remains cautious and wants to ensure inflation is sustainably controlled before making any rate cuts. Thus, the BoE is expected held the rate steady for now with potential rate cut in the coming months if inflation and economic data continue to be favorable.
Friday, 2 August 2024, 14:30
US Nonfarm Payrolls (Jul)
The latest U.S. Nonfarm Payroll report for June 2024 revealed an increase of 206,000 jobs. This figure, while below the previous month's 218,000, exceeded the market forecast of 191,000, indicating modest growth. Job gains were particularly notable in government roles, reflecting rises in local and state employment. Healthcare job growth, though still strong, fell short of last year's average, with notable contributions from ambulatory services and hospitals. Additionally, there were significant gains in social assistance and construction, driven by more employment in family services and construction projects. The upcoming data is anticipated to remain resilient, but factors such as inflation and Federal Reserve rate adjustments could influence future job growth
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The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
The Japanese Yen (JPY) strengthened against the US Dollar (USD) on Thursday, boosted by stronger-than-expected Q2 GDP growth in Japan, raising hopes for a BoJ rate hike. Despite this, the USD/JPY pair found support from higher US Treasury yields, though gains may be capped by expectations of a Fed rate cut in September.
The aftermath of the Japanese yen's strengthening has manifested in significant dips across multiple markets, including equities, commodities, and various currencies. The yen has erased all its 2024 losses against the dollar, moving towards the 145.00 mark. The dollar index (DXY) has fallen to its lowest level since March, hovering above the $103 mark.
Fed officials have indicated they are prepared to cut interest rates if necessary, though there is no immediate need. This dovish stance has been viewed positively by the markets, leading to increased buying pressure on gold. Despite ongoing inflationary risks, market expectations of a rate cut in June have risen to 66.3% (up 3% since the PCE release). Lower interest rates could enhance the appeal of non-yielding gold.
The dollar continues to tumble, trading at its lowest level since April, below the $104 mark. The U.S. Beige Book suggests economic growth has moderated and inflation shows signs of easing, strengthening the likelihood of a September rate cut. Improved risk appetite in the market propelled the Dow Jones up nearly 300 points in the last session, breaking its all-time high.