Economic calendar: Focus on FOMC minutes and Powell testimony

Summary:
- Bank of Canada expected to leave rates unchanged today
- Powell to testify in the House of Representatives
- FOMC minutes to be released in the evening

9:30 am BST - Production from the United Kingdom. A lot of the UK “hard” data will be released in the morning. Manufacturing production (May) is seen rising 2.1% MoM while the industrial production should advance 1.5% MoM. The trade balance data for May should show a deficit of 12.55 billion GBP against a deficit of 12.1 billion GBP in April. A better-than-expected reading could help lift GBPUSD off the multi-month lows but one should keep in mind that the bearish momentum on this market has been strong recently.

3:00 pm BST - Powell testifies before House Financial Services Panel. Jerome Powell, head of the Federal Reserve, will deliver the first of his congressional testimonies today. The US central banker will speak on the US economy and Fed’s monetary policy. It is expected that Powell will reiterate Fed’s previous message and his comments will point to a rate cut during the July’s meeting. However, the question remains whether the latest solid jobs market report changed anything. 

3:00 pm BST - Bank of Canada rate decision. The Canadian central bank is expected to leave interest rates unchanged today. It seems probable that the Bank of Canada will call for patience and postpone any rate decision for some time. However, traders should analyze the statement and look for comments on the exchange rate as the Canadian dollar strengthened significantly against the US currency since the latest BoC meeting.

3:30 pm BST - DOE report on oil inventories. API estimates released yesterday hinted at a major drop of 8.1 mb. The reading provided oil bulls with some fuel and has pushed crude prices higher. There is a scope for the upward move to extend but the drop would need to be confirmed by today’s DOE report. Markets expects a reading of -3.5 mb for oil stocks, -1.2 mb for gasoline stocks and a build of 1.4 mb for distillate stocks.

7:00 pm BST - FOMC minutes. It was during June’s meeting when the Federal Reserve gave some clearer hints on a potential rate cut in July. While the trade war is certainly a risk for the US economy, the US data at that time was not as bad. Having said that, markets will be focused on whether the minutes will provide any additional explanation why such a message was sent to the markets.