Market movers today
A quiet day today with Fed Chair Powell's semi-annual hearing before the Senate Banking Committee being the main event at 16.00 CEST. However, we do not expect him to send new signals and the Fed is still likely to raise rates in both September and December, in our view. Powell's testimony continues tomorrow before the House.
At 10.30 CEST, the UK labour market report is due out, which is interesting ahead of the Bank of England's decision whether to hike or not at its next meeting in early August.
At 15.15 CEST, US production data for June is due out.
Selected market news
Yesterday in Helsinki, President Putin and President Trump held their first full summit, followed by a one-hour press conference. From the point of view of the reaction of financial markets, the meeting did not bring negativity and was quite positive, while at the same time, anti-Russia sanctions were not mentioned. The RUB saluted the event with a slight appreciation during the ongoing dividend payments period.
In Scandi FX, the combination of a slightly better-than-expected Swedish house price release together with an oil price losing ground has resulted in moderate NOK/SEK selling. Our expectation, however, remains that EUR/NOK in the current environment is capped at 9.54, which limits the downside potential for NOK/SEK and thereby also EUR/SEK.
Oil prices dropped 4% yesterday with Brent falling to USD72/bbl on unconfirmed reports that Saudi Arabia is offering extra supplies to the market. In addition, the market has been speculating whether the US would release strategic reserves to the market.
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