The FOMC meeting begins today and traders will wait for tomorrow’s conclusion to see what the FED will do with rates. Most analysts are still expecting a 25 bps cut in rates, but based on the events over the weekend in the Middle East, some observers are saying the FED may leave rates unchanged. US equity markets were lower yesterday, ending an eight day winning streak, and are expected to move lower today as well.
German ZEW survey is due out today. This is the German Economic Sentiment index, reflecting institutional investors’ opinion. It is expected to worsen to -37.0 in August. This is a slight improvement from the previous month, but still shows the German economy remaining under pressure. There is also concern regarding the threat of US tariffs levied against the EU moving forward.
British PM Johnson and EU President Juncker, ended their meeting without any noticeable progress, and vowed to continue negotiations in an effort to agree a suitable deal for both sides. The UK Supreme Court will begin three day hearings to determine if PM Johnson’s proroguing of Parliament was illegal. Prorogation in the United Kingdom is an act in UK constitutional law that is usually used to mark the end of a parliamentary session.
As oil prices eased slightly overnight, the Canadian Dollar moved lower. As the market awaits the end of the FOMC meeting, the Loonie will be at the mercy of oil price dynamics. Analysts expect oil prices to remain firm in the near term.
US-China “deputy level” talks will begin this Thursday in Washington. These talks are set to pave the way for higher level talks in October. US Trade Representative Lighthizer said he was seeking a “real agreement” on intellectual property theft. He also said these meeting will set the stage for future discussions.