Core Viewpoint - Federal Reserve Chairman Jerome Powell indicated that there are two upcoming employment and inflation reports before the next meeting, which will guide future decisions [1] Group 1 - The Federal Reserve is closely monitoring employment and inflation data [1] - The outcomes of the two reports will influence the direction of monetary policy [1]

Core Viewpoint - The inflation report is generally positive, with core inflation rising by 0.2% month-over-month, aligning with expectations, while annual data is slightly above expectations [1] Group 1: Inflation Data - Core inflation's monthly increase of 0.2% meets expectations, indicating stability in inflation trends [1] - Annual inflation data is slightly higher than anticipated, suggesting some inflationary pressures may be emerging [1] Group 2: Federal Reserve Implications - The inflation data provides the Federal Reserve with breathing room, allowing them to maintain interest rates steady in July [1] - The Fed will need to consider data from July and August before making a decision in September [1]

Core Viewpoint - ANZ Bank suggests that the Federal Reserve is likely to maintain the federal funds target rate unchanged in the upcoming meeting, indicating a patient approach from Chairman Powell amidst economic uncertainties [1] Economic Indicators - Recent macroeconomic data shows a cooling job market, yet it remains relatively resilient, providing the Fed with the opportunity to focus on the forthcoming inflation report [1] Monetary Policy Outlook - ANZ Bank expects Chairman Powell to continue emphasizing patience, stating that monetary policy is in a good position to respond appropriately to developments [1]

Core Viewpoint - The mild inflation report for May has shifted traders' bets towards the possibility of an interest rate cut before October, with a focus on the Federal Reserve's upcoming dot plot for insights on policy considerations for the remainder of the year [1] Group 1 - The price increase in May was milder than expected, influencing market expectations [1] - Traders are adjusting their outlook towards potential interest rate cuts in the near future [1] - Investors are particularly interested in the Federal Reserve's dot plot for indications of future policy direction [1]

Core Insights - The recent inflation report is rated as "A+", but it contains two significant concerns [1] Group 1: Inflation Report Analysis - Analysts predict that the impact of tariffs will lead to an acceleration in the increase of commodity prices in May and especially in June [1] - Year-over-year inflation is expected to show a notable decrease by mid-2024, making the comparative base less advantageous [1]

Core Insights - The inflation report released today is described as "excellent" but highlights two potential issues that need attention [1] Group 1: Inflation Concerns - Analysts expect an acceleration in commodity price increases in May, particularly in June, due to the implementation of "Liberation Day" tariffs [1] - The year-on-year basis for inflation has become less favorable as inflation has already cooled down by mid-2024 [1] - The April core PCE price index recorded a year-on-year rate of 2.5%, marking the lowest level since March 2021 [1]

Core Viewpoint - Gold prices are expected to decline this week due to the strengthening of the US dollar, despite a year-to-date increase of over 22% [1] Group 1: Market Dynamics - The rise of the US dollar as a safe-haven asset is putting pressure on gold prices [1] - Market focus is shifting towards the upcoming Personal Consumption Expenditures (PCE) data, which is a key inflation indicator favored by the Federal Reserve [1] Group 2: Economic Indicators - The PCE report is anticipated to show a slowdown in price increases for the previous month, potentially allowing for a more accommodative monetary policy from the Federal Reserve [1] - A decrease in interest rates typically enhances the appeal of non-yielding assets like gold [1]

Group 1 - The Bank of England's recent policy stance has turned hawkish, significantly reducing expectations for interest rate cuts, with the probability of a June cut dropping from 50% to 4% [1] - Market expectations have shifted towards a greater likelihood of a rate cut in the third quarter, with current bets for an August cut averaging around 16 basis points (64%) [1] - The upcoming inflation reports may influence market expectations, with a potential downward surprise in inflation data possibly shifting sentiment back towards a dovish outlook [1] Group 2 - The short-term impact of the Bank of England's hawkish stance on the British pound is limited, with market focus shifting to the upcoming UK-EU summit, where Prime Minister Starmer aims to promote closer UK-EU relations [1] - The GBP/USD exchange rate has recently fallen below its 50-day exponential moving average (EMA50), indicating a prevailing bearish correction trend despite reaching oversold levels [1] - Any further upward movement in GBP/USD may be capped around 1.3340, with major resistance expected at 1.3405, while current trading is likely to remain within a range of 1.3220 to 1.3320 [2]