Tapering to come

Today's news headlines: 

‘Most Fed officials believe stimulus could start winding down this year’. Last night’s Federal Open Market Committee meeting minutes revealed that the timeline for tapering pandemic-related stimulus could begin as soon as this year. The latest minutes have provided a good indication of a formal announcement in the next FOMC meetings in September. The committee expressed satisfaction that the target of 2% inflation has been met, but aren't yet convinced on the health of the labour market as the target of full employment has not yet been achieved. (Financial Times)

‘Vaccines’ long-term effectiveness at preventing Covid questioned’. A recent rise in Coronavirus infections in the fully-vaccinated population has started to cast doubt on vaccine efficacy within the scientific community. This comes as the Delta variant took over as the more dominant strain in circulation. It was found that double-jabbed individuals were carrying the same viral load as their unvaccinated counterparts. Understandably, booster jabs have made headlines as the US gears up to offer these jabs in September, focusing on the vulnerable and those who got their jabs at least eight months prior. (Financial Times)


Today

A hawkish shift from the Fed pressured Cable overnight and the pair is left trading lower this morning, having found some support at the $1.37 level. EUR/USD faced similar selling pressure, falling below $1.17, the lowest level seen since July 2020. It’s set to be a quiet day for data, but US employment claims could help shed some further light on the labour market.

Events

Australia Employment Change: 2.2K vs 29.1K last month
Australia Unemployment Rate: 4.6% vs 4.9% last month
Canada ADP Non-Farm Employment Change: 1:30PM
US Philly Fed Manufacturing Index: 1:30PM
US Unemployment Claims: 1:30PM
US Mortgage Delinquencies: 3:00PM

Interbank rates:

GBP/USD – 1.3705
GBP/EUR – 1.1735
EUR/USD – 1.1677
USD/CAD – 1.2719

The markets are moving. To speak to our team, please call +44 (0)20 3465 8200.