Brief:
This week, the Federal Reserve’s meeting minutes will reveal the policymaking consensus in the face of secondary inflation risks.
Additionally, the Reserve Bank of New Zealand’s interest rate decision and the IEA’s monthly oil market report will offer crucial cross-verification of global macroeconomic fundamentals, examining the policy leeway of non-US central banks and upstream energy costs, respectively.
Key Event to Watch:
1. US June ISM Services PMI – Monday
The Services PMI published on Monday is a core leading indicator for assessing internal US inflationary pressures. Should the data show that input costs for service sector firms continue to trend upwards, it will further demonstrate the complexity of the disinflationary process, potentially supporting an upward move in US Treasury yields and the US dollar index.
2. Reserve Bank of New Zealand Rate Decision – Wednesday
On Wednesday, the focus shifts to the Reserve Bank of New Zealand (RBNZ). The New Zealand economy is currently facing a complex situation of slowing growth and stalled progress in disinflation. Consequently, the market currently sees high uncertainty surrounding the July rate decision; holding rates steady is by no means a certainty. Should the central bank lean towards supporting the sluggish economy by signalling marginal rate cuts, the New Zealand dollar will face heavy downward pressure.
3. FOMC Meeting Minutes – Thursday
The Federal Reserve will release the FOMC meeting minutes on Thursday. If the minutes show a broad consensus within the committee to remain data-dependent and maintain high interest rates, it will reinforce market pricing for a restrictive environment, driving an accelerated flow of capital back into the US dollar.
4. IEA Monthly Oil Market Report – Friday
The IEA will publish its monthly oil market report on Friday. Market attention will be focused on the IEA’s projections for the crude oil supply-demand deficit in the second half of the year. If the report highlights that the demand side remains highly resilient, it will provide a solid floor of support for oil prices. This would likely prompt the US Treasury market to maintain relatively tight pricing ahead of the weekend.
Disclaimer Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.
