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EU considers reducing tariffs on the US, US PCE data attracts much attention
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange]: The EU is considering reducing tariffs on the United States, and the US PCE data has attracted much attention." Hope it will be helpful to you! The original content is as follows:
On June 27, during the Asian market on Friday, spot gold trading around $3,323/ounce, gold prices remained stable on Thursday, investors were waiting for US inflation data to judge interest rate outlook, while paying attention to the easing of geopolitical tensions in the Middle East; U.S. crude oil trading around $65.40/barrel, oil prices rose slightly on Thursday. With the arrival of the summer driving season, U.S. crude oil inventories have declined due to increased demand, while concerns about supply risks in the Middle East have eased, limiting gains.
Eric Theoret, a Forex strategist at Scotiabank in Toronto, said: "The focus this week is certainly on the Fed, and the prospect of a faster easing of policy and potentially more rate cuts."
Feder Chairman Powell was interpreted as more dovish when he testified in the U.S. Congress this week. He reiterated expectations that inflation should rise this summer, but said "we will cut interest rates as soon as possible" if price pressures continue to be curbed.
Noel Dixon, global macro strategist at State Street Global Markets, said: "Powell has opened the door to a possible rate cut in July," said. "If the next announced consumer price inflation rate is lower than market expectations, "I think the market will start pricing the possibility of a rate cut in July."
FedFunds futures traders set the probability of a rate cut in July at 23%, up from 13% a week ago, while the probability of a rate cut in September was 93%. Overall, traders believe the rate cut was 66 basis points by the end of the year, up from 46 basis points last Friday, indicating a third 25 basis point cut.
U.S. President Trump will nominate a new one next yearThe Federal Reserve Chairman, who is expected to be more dovish than Powell, whose term ends in May.
Trump called Powell "terrible" on Wednesday and said he had three or four xmmarkets.cnpetitors to the highest Fed position in mind. The Wall Street Journal reported on Wednesday that Trump has begun considering picking and announcing Powell's successor by September or October.
Analysts say the candidate can operate as a shadow Fed chairman to weaken Powell's influence. Chicago Fed President Goulsby said that even if U.S. President Trump nominates a candidate to replace current Fed Chairman Powell, the move will not have any impact on monetary policy until the nominee is confirmed.
Asian Market
Japan Statistics Bureau showed on Friday that Tokyo's overall consumer price index (CPI) rose 3.1% year-on-year in June, xmmarkets.cnpared with 3.4% last month.
In addition, Tokyo CPI (excluding fresh food) rose 3.1% year-on-year in June, higher than expected 3.3% and lower than 3.6% last month. Tokyo's CPI except fresh food and energy rose 3.1% year-on-year in June, xmmarkets.cnpared with the previous value of 3.3%.
European Market
Bank of England Governor Andrew Bailey said in a speech today that while Britain has made significant progress in deflation, monetary policy remains restrictive to “squeeze out ongoing inflationary pressures.”
In his speech a few weeks before the August policy meeting, Bailey stressed the “bilateral risks” of inflation. He stressed that "gradual and cautious approach" is still appropriate, and that monetary policy "is not on the preset path."
Germany consumer confidence fell slightly in July, with the Gfk index falling from -20.0 to -20.3, lower than expected rebound to -19.0.
Despite some strong rebound in economic expectations, soaring 7 points to 20.1, the highest level since the early days of the Ukrainian war, it still showed a decline. Revenue expectations also improved for the fourth consecutive month, rising to 12.8.
However, the consumer environment remains dragged down by caution. The purchase intention index is as low as -6.2. The savings indicator jumped significantly to 13.9, the highest level since April 2024, indicating that households are still suppressing discretionary spending.
GfK's Rolf Bürkl pointed out that increased savings were a key drag, reflecting ongoing uncertainty and lack of confidence in making bulk purchases.
U.S. Market
Richmond Fed Chairman Thomas Barkin warned that tariff-driven inflationary pressures could intensify, even if their impact so far is not significant. “I do believe we will see price pressure,” Barkin said in a speech today, adding that while past tariff hikes have limited impact on measured inflation, “greater pressure is xmmarkets.cning.”.
Barkin also said there was no urgency to adjust policies, saying that the strong economy provided the Fed with room to stay patient. “We have time to patiently track developments and allow visibility to be improved,” he said. “When it happens, we are fully capable of solving any issues the economy needs. ”
San Fed Chairman Mary Daly reiterated her long-standing view that the central bank may start to relax policies in the fall, she told Bloomberg, “For some time, my model outlook is that we will start to be able to adjust interest rates in the fall, and I haven’t really changed that view.”
She added that the current policy is in a “good position”, showing satisfaction with the Fed’s patience stance. Daly also noted that while the labor market showed signs of cooling, it has not deteriorated to the point where immediate action is needed.
Federal Director Michael Barr said overnight that tariffs could pose a dual threat to the economy - raising inflation expectations while slowing growth. He pointed out that survey data shows that households expect sharp rises in the short term, coupled with supply chain restructuring and the second round of effect effects, may lead to "some inflation persistence."
Bar, meanwhile, acknowledged that tariffs could lead to economic slowdowns and rising unemployment rates, "the impact on low-income workers is particularly severe.
In view of these uncertainties, Barr advocates a patient policy approach. "Monetary policy is in a good position to let us wait and see how the economy develops," he said.
Boston Fed Chairman Susan Collins said in an interview with Bloomberg that it was too early to cut interest rates in July, noting that there is limited data available between now and the next FOMC meeting. "We will actually only have another month of data before the July meeting," she noted, adding, "I would like to see more information than that."
Collins stressed that there was no urgency to relax policies and reiterated her basic view that interest rate cuts could be cut later this year. Whether this means a "one rate cut" or possibly more rate cuts will depend entirely on how the data evolves.
U.S. durable goods orders rose 16.4% month-on-month to $343.6B in May, far higher than expected 6.8%. Excluding shipping orders increased by 0.5% month-on-month, higher than expected 0.1%. Excluding national defense, new orders increased by 15.5% month-on-month. Transportation equipment has grown for five months in the past six months, leading the growth, up 48.3% month-on-month to $145.3B.
As of June 21, the number of first-time unemployment benefits in the United States fell -10k to 236k, lower than the expected 247k. The four-week moving average of first-time unemployment claims fell -750 to 245k.
As of the week ended June 14, the number of people who renewed unemployment claims rose by 37k to 1974k, to 202The highest level since November 6, 1st. The four-week moving average of renewed unemployment benefits rose 17k to 1941k, the highest level since November 20, 2021.
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