Comments from The Federal Reserve’s meeting minutes last night have all but pointed towards further rate hikes in the coming months, starting with the central banks meeting later this month. The central bank are seemingly supportive of more rate hikes in the near future, due to continuously stubborn inflation as well as a strained jobs market.
Its been suggested that The Federal Reserve see their economy in better shape than elsewhere in Europe and Asia, leading The Fed to suggest rates may stay higher for longer.
Sticking with the interest rate picture, The European Central Bank is also again expected to raise interest rates later this month, with Governing Council member Joachim Nagel mentioning that further rate hikes are more likely than ever, even though these decisions will remain data led. This leads us nicely onto The Euro Area’s Retail Sales release for May which is expected to worsen slightly from -2.6% to -2.7%.
This afternoon is the beginning of US focused data releases, with ADP Employment Change set to be released. This is the measurement of non-farm private employment and usually always gives us an indication as to how the eagerly anticipated Non-Farm release will look like on the first Friday of the month. Suggestions at the minute show both sets of Job releases coming in underwhelmingly compared to last month, however as always this is the most volatile data release and any major movement on either side will affect the USD against the major currency pairs. More importantly, it’ll also play a big part in The Federal Reserve’s decision making for their Rate meeting later this month.