CENTRAL BANKERS HEADLINE LIGHT RELEASE SCHEDULE
All is calm on the economic calendar Tuesday, allowing traders to shift their attention to corporate earnings and a high-stakes healthcare battle in Washington. Nevertheless, important monetary policy implications may be gleaned throughout the day as a pair of central bank speakers make the rounds.
Bank of England (BOE) official and Monetary Policy Committee (MPC) member Andrew Haldane will deliver a speech at 10:00 GMT. Haldane was in the news last month after making a strong case for raising interest rates this year. At the time, his comments were in stark opposition to BOE Governor Mark Carney, who had vowed that monetary policy would remain unchanged for the foreseeable future.
“The risks of tightening ‘too early’ have shrunk as growth and, to lesser extent, inflation have shown greater resilience than expected,” Haldane said in a speech published last month. “Provided the data are still on track, I do think that beginning the process of withdrawing some of the incremental stimulus provided last August would be prudent moving into the second half of the year.”
Haldane was reappointed to the policy-setting board on 12 June.
Later in the day Federal Reserve Bank of Minneapolis President Neel Kashkari will also deliver a speech. Kashkari, who is a voting member of the Federal Open Market Committee (FOMC), has opposed the central bank’s plan to raise interest rates. Traders can therefore expect dovish remarks from the Minneapolis Fed chief on Tuesday.
There are no major economic data releases scheduled for Tuesday.
The US dollar has stabilized against a basket of world peers, as markets await fresh trading catalysts. The euro continues to trade just below 1.14 US. The British pound, on the other hand, is drifting below 1.29 US.
On the commodity front, traders will closely monitor weekly crude stockpile data from the American Petroleum Institute (API) at 20:30 GMT.
Crude prices bounced back on Monday after a volatile start to the day.
Lacking any major fundamental events, the EURUSD is likely to be rangebound on Tuesday. The near-term focus remains 1.1450, as a break above the critical level is needed to sustain the rally.
Pound sterling had an uneventful start to the week after incurring heavy losses during the previous session. A stronger dollar has placed downward pressure on the GBPUSD, which continues to face uncertainty in the form of Brexit negotiations. The pair faces immediate support at the 38.2% Fibonacci retracement of the June 30 uptrend, which corresponds to 1.2860.
Oil prices proved highly volatile on Monday, as the bulls struggled to reclaim lost territory. WTI is currently trading in the mid-$44.00 range, having rebounded from multi-week lows. Inventory data have been known to stoke heavy volatility in the market.