All Eyes Will be on Fed Chair Powell

All Eyes Will be on Fed Chair Powell

10 Jul 2019

Trader on Wednesday will focus on Fed Chairman Jerome Powell’s, testimony before the House Financial Services Committee. Observers will listen to see if Powell signals a coming rate cut. In his last press conference during the Fed’s June meeting Powell took a dovish stance and investors have taken that to mean an interest-rate cut is coming. The Fed fund futures contracts show that investors are assigning a 95% probability to a quarter-point reduction in rates at the Fed’s next meeting. The Fed today will also publish its June meeting minutes from the FOMC's last rate decision.

Chinese CPI Was in Line with Expectations

China's CPI was in line with expectations, unchanged at 2.7% year over year.  Food prices rose fresh fruit prices surged.  Non-food prices rose 1.4.  The Financial Times reports that Trump reportedly told President Xi Jinping of China last month that America would tone down criticism of Beijing. The US government said it will also issue licenses to companies seeking to sell goods to China's Huawei. Trade Representative Bob Lighthizer and Treasury Secretary Steven Mnuchin spoke on the phone with Vice Premier Liu He and Commerce Minister Zhong Shan this week in the first confirmed contact between the two parties.

France and Italy surprised with stronger than expected industrial output data. France reported the sentiment among manufacturers fell to its lowest level in six years.  France reported a 1.6% surge in manufacturing which fueled a 2.1% rise in industrial output. Italy's industrial output jumped 0.9% in May, well above the 0.2% median forecast. 

The UK Reports Surprisingly Robust Data

The UK reported solid economic data revealing a 1.4% rise in May industrial output.  The trade deficit fell to its lowest level since last September.  UK data has recently been weaker than expected putting the BoE in a tight position.

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