The Fed left rates unchanged, as expected, defying the Trump administration. The cracks are starting to show though, with two Fed Governors dissenting on the vote, urging other members to cuts rates now. The Fed Chairman continues to site uncertainty over trade and the impact on inflation, but this has been dismissed by Trump. Rate cuts are coming and Powell is on the way out. Attention will now turn to the US labour market and the important Non-Farm Payroll number. The Jolts Report and ADP Jobs Report have both hinted at a tight labour market. US GDP surged back strongly, erasing fears from the last reading, promising strong economic growth in the US. The fallout from the EU/US Trade deal was still being felt in the currency markets, with the EUR tumbling to 1.1460, while the GBP crashed below 1.3300The stronger reserve continued to batter commodity currencies, with the AUD now testing the downside of .6400, while the NZD has surrendered .5900. NZ Business Confidence was stronger, while Australian inflation fell more than expected, plummeting to 2.1%. The US Trade deadline is August 1st, so many Countries without previous agreements, hold their collective breath. India suffered the wrath of Trump, when he announced a minimum tariff of 25%, with additional penalty margins for ‘Russian Sanctions’ and trade barriers.
