There’s been a pretty strong move higher seen in stock markets on the continent with the Eurostoxx 50 reaching its highest level since the start of the month. After declining yesterday the markets have seemingly taken the latest political upheaval in Italy in their stride and are gaining in what is a pretty broad risk-on move. Bond yields have also risen while precious metals have pulled back with Gold dipping to the $1500/oz level once more. The FTSE 100 has added another 70 points in broad based rally, with only 4 of the benchmarks components trading lower on the day.
Fed minutes in focus
The economic calendar is pretty sparse today with Canadian inflation data and US Oil inventories of interest to CAD and crude traders but unlikely to have an impact outside of this. This evening sees the release of the minutes from the last FOMC decision and this has the potential to cause some moves, given that the central bank cut rates for the first time in a decade at this meeting. The cut itself was well telegraphed but any insight into the discussion behind the decision and in particular the reasons for the 2 dissenters to vote against it are key aspects to watch. With the release coming less than 48 hours before the eagerly anticipated Jackson Hole speech from chair Powell, the markets will no doubt be keenly attuned to any hints as to what the next likely step will be from the Fed.
Boris sets off on Euro trip
UK PM Boris Johnson has embarked on a trip around Europe where he will meet influential figures ahead of the G7 meeting in Biarritz this weekend. Despite the firm rebuttal of his open letter to Donald Tusk, reports of some conciliatory remarks from German chancellor Merkel has raised hopes that a way out of the current backstop quandary is possible. A swift move higher in the pound yesterday revealed just how sensitive the currency is to Brexit headlines at present and even though the move has subsequently faded, there at least seems to be the possibility of some good news in the coming days.
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