Quiet markets ahead of Fed Minutes

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Quiet markets ahead of Fed Minutes

JULY 07, 2021

The U.S. Dollar improved all across the board as markets await minutes from the last Fed meeting to see if there is any indication of changes towards a more hawkish stance. 

Overview

Nevertheless, stocks are recovering from the risk-off sentiment yesterday as recent soft data from the U.S. suggests the Fed will not stop its bond purchasing and other measures to keep an easy environment. The reality is that the recovery is neither too strong nor too weak, thus the belief that central banks will indeed stay put for the year.

We shall see if there is anything impactful in the Minutes and if the buck continues its strengthening trend. Thus far, the oil market concerns over OPEC+ and production in Iran have failed to boost Mexican Peso and Canadian DollarThere is anticipation building over a meeting on Friday between G-20 finance ministers, surely we shall watch for any commentary that may be too dovish over the need to keep lots of aid flowing.

What to Watch Today…

  • Fed Minutes 2 PM

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EUR  

The Euro is trending weaker as data from large Euro-zone countries keeps coming in below expectation. Industrial Production for May contracted in Germany when a half percent expansion was expected. Also, Retail Sales in May for Italy also underwhelmed with just a 0.2% growth when 3.0% was estimated. Clearly, the EU and its main economies continue to struggle to keep the desired pace in recovery the ECB or anyone would want to see.

CAD  

The Canadian Dollar fell to its weakest point since April 23rd as the risk-off sentiment took over markets. The Bank of Canada has kept saying that the economy may not need much help past this year, but the economic indicators have not shown anything amazing to say this position makes much sense. As there are contractions to overcome in such items as consumption, we feel “loonie” could have room for losses especially if there is no serious growth in demand.

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