- After a snooze on the Fourth of July, markets return to full action on Thursday.
- Five big events await traders with the best kept for last.
When the US is away, the whole world is somewhat sleepy, with markets thinned out and listless on Wednesday. American and other traders will return to the action on Thursday and a very busy schedule awaits them, centered mostly in the American session.
Here are the five big events to watch out for
1) 10:00 GMT: Carney speaks out
Bank of England Governor Mark Carney will deliver a speech in Newcastle The public appearance comes one day ahead of the US imposing tariffs on China and the heated debate in the UK government about the future relations with Europe. If the influential central banker touches on both topics, broad markets will be on the move. Any concerns can cause shivers.
On the domestic front, UK figures have been quite upbeat, especially the Services PMI and the upgrade for Q1 GDP. Optimism about the economy could raise the chances for a rate hike in August and lift the pound, while ignoring these developments could turn the tables against cable.
2) 12:15: ADP NFP
ADP's jobs report for the private sector is published on Thursday instead of on Wednesday due to the holiday, leaving traders with less time to digest the data in preparation for Friday's Non-Farm Payrolls. Job growth has been steady in May but could go either way in June.
3) 14:00: US ISM Non-Manufacturing PMI
The services sector report provides valuable forward-looking information about the largest sector in the US. Also, it is the last hint towards Friday's jobs report. The reaction to the publication also depends on the ADP report. If both publications beat expectations, the US Dollar could provide the full positive response on the second release. The same goes the other way around: two misses will see a robust downside reaction on the second release, the ISM figure.
4) 15:00 Crude Oil Inventories
Oil prices are on a roll, hitting the highest levels since 2014. One of the three upward oil drivers was the big drawdown in oil inventories last week. Similar to the ADP report, the publication has been postponed to Thursday due to the holiday. Tuesday's private report showed yet another drop in inventories and the black gold remains bid.
Apart from the impact on oil prices and the Canadian Dollar, an oil exporting nation, there are global implications as well. Higher oil prices are, at times, correlated with a weaker US Dollar. This has not happened in this cycle, but if prices spiral higher, the correlation could make a comeback.
5) 18:00: FOMC Meeting Minutes
The last word of the busy day belongs to the No. 1 influencer on the US Dollar and markets: the Federal Reserve. The Fed publishes the minutes from the "hawkish hike" decision in June. Not only did they raise rates, but also upgraded their forecast and signaled two additional increases this year. Moreover, Fed Chair Powell was bullish on the economy, and the statement was somewhat sanguine on inflation.
Powell hardly touched on trade and only said that some business contacts have expressed concern. It is important to note that the document is not a raw publication of what happened back then but rather a carefully edited paper that has markets in mind.
If the Minutes contain lengthy paragraphs about trade issues, it could have an impact, especially on the eve of a significant shot in the trade war: the imposition of tariffs on China. The US Dollar could suffer if the Fed takes trade into serious consideration.
On the other hand, if the message remains optimistic about job growth, inflation, wages, etc., the US Dollar could get another boost and rate hike expectations could further rise.
All in all, this is a busy day and there are no World Cup matches to distract traders from markets.
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