It was a hectic session with safe haven demand in full flow after sentiment turned sour Trump hinted during Asian that he wasn’t pleased with the latest China deal. That sparked a move into the Yen and Swiss franc, while Sterling and the Euro were suffering from their own issues on the back of underwhelming CPI (UK) and PMIs (Euro). Once the US got going, the FOMC minutes were largely in line with recent Fed comments and indicated that the Fed would tolerate higher inflation without rushing to hike rates. The currencies steadied and most pairs ended by reversing off their various highs/lows, while the stock markets also reversed an early selloff to finish up by around 0.25% on the day. WTI also saw a decent selloff on a buildup of inventories but then spent the day recovering but still finished down 0.5% on the day.
Thursday starts with the NZ April Trade Balance (exp +$200mio) but there is nothing else to come from Asia. Europe will look to the ECB Minutes, the German Q1 GDP (exp 0.3%qq, 1.6%yy) and June Consumer Confidence Survey, while the UK April Retail Sales will also be released (exp 0.7%mm, 0.1%yy). There will also be plenty of CB speakers in the European time zone, including the Fed’s Dudley, BOE’s Carney and ECB’s Praet. Meanwhile, the ECB’s Mario Draghi and Benoit Coeure participate in Eurogroup meeting in Brussels. The US session will look to the Kansas Fed Mfg Activity, Existing Home Sales (Apr), House Price Index and the weekly Jobless Claims for guidance. There will also be speeches from the Fed’s Bostic and also from Carney (again!).
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