Core Viewpoint - The Reserve Bank of Australia (RBA) Chairman, Philip Lowe, indicated that the committee believes the overall risks are balanced, the economy is in good shape, and the labor market remains robust. Recent data suggests that upward pressure may be greater than previously thought in August. The decision for November will depend on the data, whether to lower interest rates or maintain the current status [1]. Group 1 - The RBA sees overall risks as balanced [1] - The economy is reported to be in good condition [1] - The labor market is described as robust [1] Group 2 - Recent data indicates that upward pressure on the economy may be larger than anticipated in August [1] - The decision regarding interest rates in November will be data-dependent [1]

Group 1 - The Federal Reserve is set to announce its interest rate decision and monetary policy statement at 18:00 GMT, followed by a press conference by Chairman Jerome Powell at 18:30 GMT [1] - A surprise 50 basis point rate cut could lead to significant selling pressure on the USD, while a 25 basis point cut with a dovish outlook could weaken the dollar [3] - Market participants will closely monitor Powell's comments regarding labor market and growth outlook, as concerns may negatively impact the USD, while inflation risks could support it [3] Group 2 - Deutsche Bank analysts predict that the updated Summary of Economic Projections (SEP) may indicate a total rate cut of 75 basis points by 2025, which is 25 basis points higher than the June forecast [3] - There may be differing opinions within the committee, with potential for three members advocating a 50 basis point cut, marking a significant divergence not seen since 1988 [3] - The short-term technical outlook for EUR/USD remains slightly bullish, with the RSI above 50 and trading above the 20-day and 50-day simple moving averages [4] Group 3 - EUR/USD may test resistance levels at 1.1900 and 1.2000, with the first resistance at 1.1830, while support is seen at 1.1680-1.1660 and subsequently at 1.1540 [5]

Core Insights - The inflation rate in the U.S. rose to 2.9% in August, highlighting the challenges faced by the Federal Reserve ahead of a significant interest rate decision [1] - The annual Consumer Price Index (CPI) exceeded July's rate of 2.7% and aligned with analyst expectations of 2.9% [1] - The core inflation rate remained stable at 3.1%, consistent with forecasts [1] Economic Context - The Federal Reserve is grappling with a weak labor market and political pressure from President Trump to lower interest rates [1] - Traders continue to anticipate a 25 basis point rate cut by the Federal Reserve next week, with expectations for a slightly accelerated pace of cuts in subsequent meetings [1] - Federal Reserve Chairman Jerome Powell has indicated the possibility of a rate cut in September, suggesting that labor market weakness may mitigate the inflation risks associated with Trump's tariffs [1]

Core Viewpoint - The European Central Bank's interest rate decision was unanimously agreed upon by the governing council members, indicating a strong consensus on risk assessment [1] Group 1 - The governing council members reached a consensus on the risk assessment, suggesting a unified approach to current economic conditions [1] - Trade agreements are expected to eliminate some uncertainties, potentially stabilizing the economic environment [1]

Group 1 - The core point of the article is that the European Central Bank (ECB) President Christine Lagarde announced that today's interest rate decision was unanimously agreed upon by all members [1]

Core Viewpoint - The European Central Bank (ECB) is expected to maintain interest rates at 2% during its upcoming meeting, marking the first time in a year that rates will remain unchanged as the bank awaits clarity on the impact of U.S. tariffs on inflation [1][4] Interest Rate Decisions - The ECB plans to significantly lower borrowing costs by 200 basis points between June 2024 and June 2025, aiming to keep deposit rates within a range that neither suppresses nor stimulates the economy [4] - ECB officials are divided on future actions, with some advocating for further easing due to concerns that inflation may remain below the 2% target, while others warn that increased public spending could lead to higher prices in the future [4][7] Economic Outlook - The uncertainty surrounding U.S. tariffs, particularly President Trump's threat to impose a 30% tariff on the EU starting August 1, has increased risks of a worse-than-expected economic outcome [7] - The ECB's most severe trade scenario predicts a 20% tariff on all European goods, which could further depress inflation [7] Euro Strength - The euro has appreciated by 13% against the dollar this year, raising concerns among policymakers as it makes exports more expensive and lowers import costs [8] - ECB officials are cautious about the euro's strength, with potential implications for future interest rate decisions if the euro surpasses 1.20 against the dollar [8] Communication Challenges - The ECB's policy statement and President Lagarde's remarks are unlikely to change significantly, but the wording used to describe the decision to maintain rates could influence market expectations regarding future rate cuts [9][12] Official Changes - The July meeting marks the first for Olaf Sleijpen as a council member, succeeding Klaas Knot as the Dutch central bank governor, while the departure of hawkish figures like Austrian central bank governor Robert Holzmann may influence future policy discussions [13]

Core Viewpoint - The Reserve Bank of Australia's Governor Bullock does not believe that the employment report will alter interest rate decisions [1] Group 1 - The employment report is not expected to influence the Reserve Bank's monetary policy [1] - Bullock's stance indicates a focus on broader economic indicators rather than just employment data [1]

Core Viewpoint - The Reserve Bank of Australia's Governor, Philip Lowe, indicated that fluctuations in monthly employment data will lead the committee to make similar interest rate decisions [1] Group 1 - Monthly employment data is subject to volatility, which influences the Reserve Bank's decision-making process regarding interest rates [1]

Core Viewpoint - The Federal Reserve's FOMC statement indicates that all committee members unanimously agreed on the current interest rate decision, maintaining consistency with the previous meeting [1] Group 1 - The decision reflects a consensus among committee members, suggesting stability in monetary policy [1] - The interest rate remains unchanged, indicating a cautious approach to economic conditions [1]

Group 1: Currency Market Overview - The euro attracted some dip-buying, rising to around 1.1450 during the European session [1] - The British pound gained traction above 1.3550 due to a weaker dollar [1] - The Japanese yen maintained slight gains, with USD/JPY dropping to the 144.20 area, marking a new daily low [1] - The Australian dollar slightly recovered from previous losses, while the New Zealand dollar traded around 0.6040, recovering recent declines [1] Group 2: U.S. Economic Indicators - U.S. non-farm payrolls for May slightly exceeded expectations, with previous months' data significantly revised down [2] - The unemployment rate remained stable, and average hourly earnings were better than expected, leading to reduced bets on Fed rate cuts [2][3] Group 3: Central Bank Insights - Federal Reserve officials emphasized the need for patience, indicating that it is not yet time for preemptive measures [3] - The Fed is expected to propose changes to the regulatory ratings for large banks to enhance the supplementary leverage ratio [3] - The European Central Bank's officials expressed differing opinions on interest rate decisions, with the neutral nominal rate estimated at around 3% [6][9] - The Bank of Japan is reportedly considering slowing the pace of its bond purchase reductions [7] Group 4: Technical Analysis - The GBP/USD is trading near the 20-period simple moving average, indicating a retreat of buyers, with resistance levels identified at 1.3590-1.3600 and 1.3700 [14] - The AUD/USD is consolidating between support at 0.6400 and resistance at 0.6500, with the RSI indicating a balance of power between bulls and bears [14] - For USD/JPY, failure to hold the support near 144.25/50 could lead to further declines, with key support at 142.37 [15]