Resume af teksten:
I går oplevede markederne kortvarigt en potentiel fyring af Fed-chef Jerome Powell af Trump, hvilket forårsagede en midlertidig stigning i EUR/USD. Trumps senere benægtelse genoprettede markedets ro, men episoden mindede om USD-risikoen ved sådanne nyheder. Med PPI-tal under forventningerne og en kommende fokus på detaildata, forventes en svag dollarstyrkelse på kort sigt. På EU-fronten forhandler Ursula von der Leyen om en fremslået budgetforhøjelse, der kan påvirke euroens langsigtede værdi. I Storbritannien blev UK-lønnedgangen for maj stærkt revideret, hvilket reducerede pres på Bank of England. I Ungarn faldt forbrugernes tillid grundet svag lønvækst, og HUF stabiliserer sig midlertidigt nær 400 EUR/HUF med udsigt til stigning på grund af forventet svagere inflation.
Fra ING:
For less than an hour yesterday, it looked as if Trump was about to remove Fed Chair Powell. Markets never fully priced it in, but EUR/USD still jumped 1.3% before Trump’s denial triggered a reversal, underscoring the scale of USD risk tied to this scenario. After yesterday’s scare, markets have probably built even more resistance to headlines on this topic
Jerome Powell, Chairman of the Federal Reserve
USD: Focus returns to macro after Powell scare
Last Friday, we published a note looking at the market implications of a potential early departure of Fed Chair Powell. We deemed that an unlikely scenario, but for an hour yesterday afternoon it appeared very real. It was initially reported that a letter had been prepared by Trump and presented to GOP policymakers, and at one point the White House confirmed Trump was about to fire Powell. Shortly after, Trump said it was “unlikely” he would fire Powell.
In that hour, we saw the reaction we would have expected: a steepening in the US yield curve, and the dollar sharply lower. However, it never looked like markets fully priced in Powell’s exit yesterday afternoon. Pricing for a September Fed cut didn’t go beyond 20bp, and EUR/USD failed to get beyond 1.1720 even before Trump’s denial caused an unwinding of all market moves. It’s a clear symptom of the resistance developed by markets for the rollercoaster of headlines that have characterised Trump’s term so far. After yesterday’s scare, the bar will be even higher to take Fed independence threats seriously.
On the macro side, PPI figures came in below expectations yesterday, but this failed to wash away Tuesday’s CPI reality check, which is keeping markets from pricing in more than 15bp for the Fed’s September meeting. Today’s US calendar highlights are retail sales data for June and TIC data for May. We’ll look closely at the latter to see if there is any hard evidence of a substantial rotation away from US Treasuries, which can feed into the longer-term bearish USD argument. But for the near term, we still like the chances of dollar consolidation or slight re-appreciation.
Francesco Pesole
EUR: EU budget has long-term EUR implications
Aside from the very brief spike induced by Powell removal speculation yesterday, EUR/USD looks rather comfortable trading in the low 1.16s. That’s despite USD short-term swap rates trading some 4-5bp below yesterday’s peak, as risks of the new Fed Chair being an ultra-dove increased.
Anything EU-related appears to be playing second fiddle to EUR/USD. We discussed yesterday how French political noise can return in the autumn and generate some FX spillover, but for now it’s not showing any tangible impact on FX. On the broader EU level, the European Commission has proposed a €2tr increase in the EU budget, which has already been rejected by Germany. There’s a long period of negotiations ahead as Ursula von der Leyen aims to gather a unanimous consensus on the budget increase by 2027. We’ll hear a lot about this along the way, and the implications for the long-term value of the euro are non-negligible. Moribund eurozone productivity relative to the US has contributed to keeping the medium-term EUR/USD fair value capped in the past decade.
Back to the short term, we think risks are balanced for EUR/USD and heavily US data dependent. In the coming weeks, we think a move to 1.150 looks more likely than 1.170.
Francesco Pesole
GBP: May’s job drop heavily revised
Last month, a surprise 109k fall in May UK payrolls opened the discussion on whether the Bank of England had to accelerate easing. That figure was revised massively today to just -25k. June added another 41k worth of job losses, which confirms a clear softening pattern, but the big revisions for May should take some heat off the BoE.
Wage growth is also still too high for the BoE’s liking, though on a 3M annualised basis, private sector pay is rising at 3.6%, which is better than the year-on-year numbers indicate and is lower than we saw much of last year.
EUR/GBP reaction to the data has been modestly negative, but given the bar for a BoE dovish repricing is now higher, the 0.870 level should work as a sturdier resistance.
Francesco Pesole
HUF: We don’t see more gains
Yesterday’s wage data surprised on the downside again after an upside surprise in April, closer to the previous trend. As our economists discussed yesterday , wage growth reached a historical average in Hungary. This could potentially harm households’ perception of their financial situation and, as a result, diminish consumer confidence.
With an expected average inflation rate of 4.6% this year, real wage growth may slow to around the historical average of 3.2%. A key question for 2025 is whether consumer confidence can recover in a situation where the perceived change in financial conditions is weaker than during the past year or two. For now, the answer is probably no, given that the consumer confidence index has fallen to its lowest point in nearly 18 months over the past two months.
The forint saw a decent rally in June and we have seen building long positioning in the market as a view of high carry and lower volatility during the summer. While there have been many market calls at 390-395 levels, we remain in a more neutral camp at current levels around 400 EUR/HUF. As we mentioned in early July , the market has priced out most of the rate cuts and we can’t see more support from this side in our view. Although we do not expect rate cuts this year, July should show weaker inflation numbers, which may lead to more dovish pricing and again undermine HUF strength. Thus, we don’t expect much from current levels now and in future expect EUR/HUF to rise again to 410 by the end of the year in our forecast under more dovish market pricing.
Frantisek Taborsky
Hurtige nyheder er stadig i beta-fasen, og fejl kan derfor forekomme.
