Today, the biggest news in the financial market will be Jerome Powell, who will be testifying in congress. The Fed Chair’s testimony will be the first one since the US reported excellent jobs numbers for the month of June. In the month, the economy added more than 224k jobs, which was higher than the 160k that investors were expecting. It was also higher than the previous month’s 75k jobs. As a result of the positive jobs numbers, investors will want to know whether the Fed chair still believes that more rate cuts are necessary. Before the jobs numbers, traders had priced-in three rate cuts for this year but this has been revised to two. Investors will also receive the minutes of the previous meeting by the Federal Reserve.
The Bank of Canada (BOC) will also be in the spotlight today. This is because the bank is expected to announce its interest rates decision today. Investors expect the bank to leave interest rates unchanged at the current level of 1.75%. They expect the bank to guide that there might be no more rate hike or cut this year. This will be the sixth straight monetary policy meeting that the bank has left rates unchanged after hiking in October last year.
There will also be focus on the UK as the sterling trades at the lowest level this year. The country will release important economic data. The GDP is expected to have expanded by 0.3%, which may be slightly higher than the previous decline of -0.4%. The index of services is expected to have increased slightly by 0.1%. The industrial production is expected to have increased on by 1.6% on a MoM basis. This is slightly higher than the previous decline of -2.7%. The manufacturing production is expected to have increased by a MoM rate of 2.2%, which will be higher than the previous decline of -3.9%. The trade deficit is expected to have increased slightly to GBP 12.55 billion from the previous GBP 12.11 billion. The non-EU trade deficit is expected to have increased to GBP 4.70 billion from the previous GBP 4.6 billion.
The EIA will release the crude oil inventories data today. The numbers are expected to show that the US stocks declined by more than 3.08 million barrels after declining by more than 1.08 million barrels previously. Late yesterday, data from API showed that the inventories slumped by more than 3 million barrels. Meanwhile, the gasoline inventories are expected to have declined by 1.3 million barrels from the previous 1.583 million barrels. The weekly distillates are expected to have risen by more than 0.739 million barrels.