- A weaker German IFO indicator pushed European shares lower this morning, but losses were mostly reversed in afternoon trading. US Equities opened lower, but recouped their losses after stronger than expected eco data (new home sales and consumer confidence).
- Bank of England Governor Carney provided a mixed message to the Parliament’s Treasury Committee today by saying the UK economy is likely to grow more strongly than expected in the second half of the year, but subdued wage growth suggests that there is still spare capacity to be used up before raising interest rates. Carney said the exact timing of the first rate move would depend on the progress of the economy.
- The Hungarian central bank cut its main interest rate by 10 basis points to a new record low of 2.30%, in line with market expectations. The central bank said that the base rate has approached levels ensuring the achievement of the CPI target, but added that further cautious rate cuts remain possible. The forint weakened slightly today.
- Turkey’s central bank cut its main interest rate slightly more than expected today, by 75 basis points to 8.75%, to boost economic growth, while ignoring the uptick in inflation. In May, inflation rose to a 2-year high of 9.66% Y/Y. The lira stayed broadly unchanged today.
- Japanese Prime Minister Abe unveiled today his package of measures aimed at boosting long-term growth, which included corporate tax cuts and a bigger role for women and foreign workers
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EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap
SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
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