Attention is likely to focus on remarks by ECB President Lagarde

Attention is likely to focus on remarks by ECB President Lagarde

09.07.2021

Yesterday, the three major U.S. stock indices all fell, leading to a market environment characterized by falling stock prices, a stronger yen, and lower interest rates. U.S. initial jobless claims released yesterday came in at 373,000, a slight increase from the previous week and higher than the forecast of 350,000. Combined with a decline in long-term U.S. Treasury yields, this resulted in an overall risk-off sentiment.

In the foreign exchange market, while the U.S. dollar is showing signs of weakness against the yen, it remains strong against European currencies, causing the EUR/USD exchange rate to remain range-bound. At yesterday’s press conference, ECB President Lagarde explicitly stated that “the 2% inflation target is not a ceiling,” signaling a willingness to tolerate inflation exceeding 2%.Since the EUR/USD pair is approaching the lower end of its range around 1.17 on the daily chart, we will be watching its future movements closely.

Today, at 3:00 PM Asia time, UK GDP and UKIndustrial Production are scheduled for release at 15:00 during Asian trading hours; Turkey’s Current Account Balance at 16:00 during European trading hours; remarks by UK BOE Governor Bailey and ECB President Lagarde at 19:00; UK Trade Balance and UK Goods Trade Balance at 20:00; Canada’s Unemployment Rate and Net Change in Employment at 21:30 during U.S. trading hours; and U.S. Wholesale Inventories (final) at 23:00.We will carefully monitor price movements over the weekend while keeping an eye on the balance between U.S. and European currencies.