The Federal Reserve delivered a 75 basis point rate hike this week, in-line with market expectations. However, the decision came before the US GDP report release that pointed to the second straight quarter of lower activity. Whether Powell was right saying that the jobs market remains strong will be put to test next week with the release of the NFP report for July. OPEC+ meeting and rate decision from RBA and BoE will also be on watch. Be sure to watch USDCAD, OIL and GBPAUD in the next week.
USDCAD
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Open account Try demo Download mobile app Download mobile appFed Chair Powell said that jobs gains remain robust when he justified the latest 75 basis point rate hike. This view will be put to the test this Friday at 1:30 pm BST when the US NFP report for July is released. Market expects the addition of just 250k jobs, which would be the lowest reading since November 2021. Any softer reading would put a big rate hike in September under question. USDCAD is likely to be volatile during release as Canadian jobs market report will also be released on Friday, 1:30 pm BST
OIL
Members of the OPEC+ cartel will meet this Thursday to discuss production levels for September. This will be the first meeting of oil producers following Biden's visit to the Middle East and will show whether the US President managed to persuade Gulf countries to boost oil output. However, as recession fears mount and outlook for oil demand weakens, the case for an output hike gets weaker and weaker. Oil managed to recover from recent lows but continues to trade at low levels compared to earlier months.
GBPAUD
While investors will have to wait until September for the next FOMC meeting, rate decisions from BoE (Thursday, 12:00 pm BST) and RBA (Tuesday, 5:30 am BST) will be announced next week. Both central banks are expected to deliver rate hikes this week and in both cases market expectations are split between 25 and 50 basis point moves. As such, there is a scope for rate surprise. However, markets will likely focus on forward guidance and whether the RBA and BoE sees signs of recession.
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