We may find the top scheduled event risk next week displaced for market moving potential by an increasingly volatile theme. Key event risk ahead includes Friday’s US 2Q GDP update and the global PMIs for July which would seem to put the focus on growth and recession concerns. Yet, the muddled picture from Fed remarks this past week and an ECB rate decision may find far more volatility in monetary policy.
The US Dollar may find itself propelled higher if the IMF’s updated assessment of the world economy and an underwhelming US GDP data report stoke demand for liquidity.
The Euro has struggled in recent sessions as the July ECB meeting has come into focus. With markets essentially predicting a coin flip’s chance of a rate cut, EUR-crosses appear destined for volatility in the second half of the week.
The Australian Dollar has shared fully in the broad US Dollar weakness seen as markets become more certain that US rates are going lower.
The price of gold made a fresh six-year high Thursday, fueled by dovish Fed commentary. This stimulus comes on the back of recent, heavy, central bank buying of the precious metal alongside large gold ETF inflows.
Crude oil prices may continue to fall after suffering the largest weekly drawdown in two months as the outlook for global growth – and thereby energy demand – sours.
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