US Open – Powell Day 2, Gold eases on US data beat, oil higher on hurricane risk, Bitcoin slumps

Jul 11 13:07 2019 Print This Article

Inflation appears to have stabilized and this will put a wrench in some Fed rate cut bet forecasts.  With wage pressure not delivering a powerful effect on inflation, we should still see day two of Fed Chair Powell’s testimony keep the rate cut expectations in place for the July 30-31st meeting.  Moderate inflation, growing global uncertainties, and a strong labor market will support the argument for only a 25-basis point rate cut at the end of the month.  Calls for a 50-basis rate cut will require the July 26th advance reading of second quarter GDP to fall well below the 2.0% analysts’ expectations. 

Jobless claims also had its best reading in 12-weeks, surprising many analysts who thought we would see a strong rise as automakers close up assembly plants for annual retooling.

Treasury yields popped on the better than expected core consumer inflation and jobless claims data, while the dollar was unable to muster up a meaningful rebound.  Markets appear convinced Powell will not deliver any surprises today.

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