The BOE is up today!
Word around is that we’ll see a 25bps rate hike. Will the event help extend GBP/CHF’s uptrend?
Before moving on, ICYMI, yesterday’s watchlist looked at USD/JPY’s broken support zone ahead of U.S. mid-tier report releases. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
ADP Non-Farm Employment Report for July: 324K (210K forecast; 455K previous)
EIA Oil Inventory Change: -17.05M vs. -600K previous; a record fall following OPEC+ output cuts
Australia prints 11.32B AUD trade surplus in June (vs. 11B AUD expected, 11.79B AUD in May) as imports (-3.9%) shrank faster than exports (-1.7%)
Australia’s retail sales volume fell by 0.5% q/q in Q2, their third consecutive decline, as consumers respond to cost-of-living pressures
China Caixin services PMI improved from 53.9 to 54.1 in July, marking the seventh consecutive month in expansion territory
The BOJ launched a second unscheduled bond-buying operation, said it would buy 400B JPY ($2.8B) worth of securities after the 10-year note hit a fresh nine-year high of 0.65%
Germany’s trade surplus widened from 14.4B EUR to 18.7B EUR in June as exports (+0.1% m/m) outpaced imports (-3.4% m/m)
Swiss headline inflation down 0.1% m/m (1.6% y/y) as expected in July, core CPI dipped by 0.2% (-1.7% y/y)
Price Action News
Another day, another chance to see JPY move all over the charts!
In case you missed it, the Bank of Japan (BOJ) launched another unscheduled bond-buying operation after Japan’s 10-year bond yields hit a fresh nine-year high earlier today.
The move weighed on JPY for a while before global growth jitters and overall risk aversion dominated market price action.
The safe-haven yen not only erased its intraday losses but also made new intraday gains against its major counterparts.
Eurozone’s PPI at 9:00 am GMT
BOE’s monetary policy decision at 11:00 am GMT
BOE Gov. Bailey to give a presser at 11:30 am GMT
U.S. Challenger job cuts at 11:30 am GMT
U.S. initial jobless claims at 12:30 pm GMT
U.S. ISM services PMI at 2:00 pm GMT
U.S. factory orders a 2:00 pm GMT
RBA’s quarterly statement at 1:30 am GMT (Aug 4)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
Who’s ready for the BOE?
An increase in the number of “hold” voters could shift the overall event into a “dovish hike” that may weigh on GBP.
But if the BOE surprises us with a 50bps rate hike like some traders are pricing in, then we could see a GBP/CHF rally.
GBP demand from a hawkish hike or a more risk-friendly trading environment could extend GBP/CHF’s uptrend.
The pair could bounce from the channel and S1 levels and test the 1.1170 Pivot Point and mid-channel area before finding enough sellers.
Watch this one closely, yo!