Daily Update - 20th June 2017
With the start of Brexit negotiations looming, the British government has only the most tenuous grip on power. The main thing is to agree to reach a deal of some kind before the U.K. officially leaves the EU on March 29, 2019. If this doesn’t happen, the result will be a chaotic exit that would be terribly damaging for the U.K. and pretty bad for the EU as well. It’s a needless risk. The way to avoid this so-called cliff-edge scenario it is to aim for a transitional accord that allows as much time as necessary to design a longer-term relationship. However, U.S. inflation is a bit low but should rebound alongside wages as the labor market continues to improve, an influential Federal Reserve official said on Monday, reinforcing the message that a recent patch of weak data is unlikely to derail plans to keep raising interest rates.The comments by New York Fed President William Dudley, a close ally of Fed Chair Janet Yellen, were among the first after the U.S. central bank hiked rates last week in the face of a series of soft inflation readings. Today’s report will be coming from Australia as they will be releasing the meeting minutes that was published two weeks after the interest rate decision. The minutes will give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Across the pond, things were certainly more volatile, with Carnage Carney doing his part with the pound, the BoE Governor downplaying any hopes of a near-term rate hike. Coming from US FOMC Fischer is due to speak today, day will end with BOJ as they will release their Monetary Policy Meeting Minutes that are held to review economic developments inside and outside of Japan and indicate a sign of new fiscal policy. Any changes in this report tend to affect the JPY volatility.Yesterday’s Focus
Today’s Focus
