Welcome to Extreme Investor Network! Today, we are diving into the latest updates from the world of finance, specifically focusing on the UK economy, Bank of Japan rate hike possibilities, and the upcoming US Employment Situation Report.
The Bank of England (BoE) has been sending mixed signals recently, with Chief Economist Huw Pill highlighting concerns about services inflation and wage growth showing ‘uncomfortable strength’. The latest CPI inflation print for June remained at +2.0%, meeting the BoE’s target but with services inflation still a worrying factor. Unemployment rates have also remained at 4.4%, pointing to a softening job market despite elevated wage growth. On a positive note, Gross Domestic Product (GDP) grew by +0.4% between April and May, indicating a potential economic recovery for the UK.
Over in Japan, the Bank of Japan (BoJ) is set to hold a policy meeting with expectations of a possible rate hike. While there is a 65% chance of a rate hike being priced in, recent Japanese yen appreciation may influence the central bank’s decision. Additionally, the BoJ is expected to announce plans to reduce its government bond holdings, with a gradual decrease in monthly purchases likely.
Looking ahead to the US, investors are eagerly awaiting Friday’s US Employment Situation Report for July. Forecasts suggest a potential slowdown in employment growth, with the unemployment rate expected to remain unchanged at 4.1%. Any surprises in the data could impact the future rate path for the Federal Reserve and influence market sentiment towards the US dollar.
Stay tuned for more updates on the G10 FX market and other key events throughout the week. Extreme Investor Network is your go-to source for expert insights and analysis in the world of finance. Happy investing!