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July 26, 2024
Preview: Due August 5 - U.S. July ISM Services - Unlikely to match strong S&P Services PMI
July 26, 2024 6:53 PM UTC
We expect July’s ISM services index to correct higher to 51.0 after slipping to 48.2, its lowest since the pandemic in May 2020. However the index will remain a lot weaker than the S and P services PMI, which in July saw a third straight rise to 56.0, to its highest since March 2022.
Preview: Due August 6 - U.S. June Trade Balance - Deficit to narrow on goods
July 26, 2024 3:40 PM UTC
We expect June’s trade deficit to slip to $73.4bn from $75.1bn, which would be the first narrowing since March. We expect exports to rise by 1.6% after a 0.7% May decline and imports to rise by 0.7% after falling by 0.3% in May.
Argentina: Making Sense of the Three Stages Plan
July 26, 2024 2:51 PM UTC
The Central Bank of Argentina's plan for macroeconomic stabilization includes three stages: an orthodox fiscal exit, establishing an orthodox monetary framework, and prudently lifting FX controls. The fiscal deficit reduction has helped end the monetization of the deficit, while transitioning to a c
FOMC Preview for July 31: Opening the Door for Data-Dependent Easing
July 26, 2024 2:18 PM UTC
Bottom Line: The FOMC meets on July 31 and while a change in rates remains unlikely, the FOMC is likely to signal that easing is possible if data before the next meeting on September 18 provides further evidence of falling inflationary pressure. This will see changes to the wording of the statement,
CBR Hiked Key Rate to 18% as Inflation Soars
July 26, 2024 2:16 PM UTC
Bottom Line: As we predicted, Central Bank of Russia (CBR) announced on July 26 that it increased its policy rate by 200 bps to 18% after four consecutive rate holds, and first time in 2024, to tame the stubborn price pressures stemming from high military spending, tight labour market and fiscal pol
U.S. June Personal Income and Spending - Core PCE Prices acceptably subdued, Income underperforming Spending
July 26, 2024 1:03 PM UTC
June’s personal income and spending report is largely old news, with Q2 totals seen in the GDP detail. In Q2 income surprised on the downside but spending and PCE prices surprised on the upside. For prices and spending the Q2 surprise came more in back month revisions than June data. For income th
FX Daily Strategy: N America, July 26th
July 26, 2024 8:57 AM UTC
FX market dominated by fluctuating risk sentiment
Much of the JPY gain reflects a big overshoot since early May, but JPY remains undervalued
Risk positive currencies may now be oversold, notably NOK
More neutral market Friday after Tokyo CPI comes in in line with consensus
FX Daily Strategy: Europe, July 26th
July 26, 2024 4:31 AM UTC
FX market dominated by fluctuating risk sentiment
Much of the JPY gain reflects a big overshoot since early May, but JPY remains undervalued
Risk positive currencies may now be oversold, notably NOK
Tokyo CPI may determine risk tone on Friday
July 25, 2024
BoE Preview (Aug 1): Time to Get Less Restrictive
July 25, 2024 3:20 PM UTC
We still think that the BoE will cut Bank Rate by 25 bp at the Aug 1 MPC verdict and that that two further such cuts may arrive by end-year. We accept that stubborn services inflation may harden the hawks, despite softer wage pressures. But while the recent Bernanke Report recommended phasing ou
Preview: Due July 26 - U.S. June Personal Income and Spending - Q2 data implies some surprises, but possibly in back month revisions
July 25, 2024 2:21 PM UTC
Ahead of the GDP report, we forecast a 0.1% increase in the June core PCE price index, with a 0.3% rise in personal income and a 0.2% rise in personal spending. If there are no revisions to April or May, we would see a core PCE price index rounded up to 0.3%, with personal income unchanged and spend
Mexico: Mixed Signs for Banxico
July 25, 2024 1:52 PM UTC
The Mexican economy shows mixed signals for Banxico. Economic activity indicates a slowdown, with weaker industrial activity and decelerating formal employment. However, inflation is rising, particularly in non-core components like energy and agricultural goods, influenced by climate conditions. The
US Q2 GDP exceeds expectations, business investment the main upside suprise
July 25, 2024 1:06 PM UTC
Q2 GDP has come in significantly stronger than expected with a 2.8% increase while core PCE prices are also above consensus at 2.9%, which suggests despite yesterday’s call from former New York Fed President Dudley, a July Fed easing remains very unlikely.