Commerzbank: Gold To Focus On Central Banks, Jobs Data
All eyesin the gold market will be on meetings of the Federal Open Market Committee andother central banks this week, as well as the monthly U.S. jobs report onFriday, says Commerzbank. Fed rate hikes or hawkish commentary, as well asstrong jobs data, tend to undercut gold, and vice-versa. However, rate hikes inother nations could help gold by hurting the U.S. dollar. “Market participantsare likely to be focusing on the Fed meeting this week, though we do not expecta rate hike this time. This is likely to happen at the next meeting inSeptember,” Commerzbank says. “The meetings of the Bank of Japan (tomorrow) andof the Bank of England (Thursday) could also be of interest. What is more, theU.S. labor market report on Friday will be relevant to the gold price.”
By Allen Sykoraof Kitco News; asykora@kitco.com
BBH: FOMC Likely To 'Stand Pat' On Rates, Statement
Monday July 30, 2018 08:58
The Federal Open Market Committee likely “willstand pat” on interest rates and not issue any new wording in itscommuniqu?(C) this week that would “undermine expectations for continued gradualnormalization of policy,” says Brown Brothers Harriman. A two-day meetingstarts Tuesday, with a policy statement due out Wednesday afternoon. “Indeed,the statement itself needs only minor adjustments,” BBH says. “The generalassessment of the economy it provided in June won't have to be tweaked much to keepit relevant. Its judgment that the risks to the outlook of roughlybalanced will likely be retained.” BBH adds that policymakers mayacknowledge some risk to the economy from rising trade tensions. “Since the FOMC will wait until thelate-September meeting to hike rates again, when there will be updatedforecasts and a press conference, there is little to dissent about,” BBH says.“However, there is some precedent for dissents from a regional president overan economic characterization. Atlanta Fed's [Raphael] Bostic, who appears to be the most concernedamong voting FOMC members of the risk of an inverted curve, could be such apotential candidate. “
By Allen Sykoraof Kitco News; asykora@kitco.com
TDS: Fed May Be 'Least Interesting' Central-Bank Story Of The Week
Monday July 30, 2018 08:58
SeveralGroup of Seven central banks meet this week, and the U.S. Federal Open MarketCommittee may not necessarily be the most newsworthy one for markets, says TDSecurities. Traders will be watching to see which banks are hawkish, as thatinfluences the U.S. dollar and thus gold. Bank of Japan, Bank of England andFed policymakers all meet. “For once the Fed could be the least interestingstory of the week as the market hones in on the BOJ and the BOE,” TDS says. “Wedon't think the BOJ will deliver any meaningful policy shifts, though thepolicy cat is out of the bag and the next move for the BOJ is less rather thanmore stimulus .... The BOE is expected to deliver a rate hike, though GBP [theBritish pound] will have to contend with Brexit headlines and broader USD [U.S.dollar] trends. We think the USD has reached peak optimism, leaving GBP someroom to benefit from the hike, especially as valuations look clean.”
By Allen SykoraFor Kitco News
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