This afternoon's speech by Fed Chair Yellen at 12:30 Eastern (16:30 GMT/17:30 BST) is expected to reveal her reiteration the message that more will be needed from jobs and inflation before rates lift-off, especially 48 hours before another emergency EU/Greece summit. Yellen's take on the China and Greece issues will undoubtedly be highlighted as to be taken into consideration by the Federal Reserve. Yellen will be asked more on these global issues on Wednesday's semi-annual testimony to Congress (a crucial hour, coinciding with the Bank of Canada decision).

Wednesday's release of the Fed minutes from the June meeting highlighted a warning by a number of FOMC members to avoid premature tightening, while broadening their mention of Greece risks and the market fallout (not economic) onto global risk appetite. More importantly, the Fed faces an increasingly high bar for rates liftoff, underlined by three conditions: i) prolonged strength in GDP growth (this was revised down at June FOMC); ii) persistent improvement in labour markets (participation rate fell to fresh record low, average hourly earnings came up short); iii) inflation must continue trending upwards towards 2.0% target (core PCE fell to 1.24% in May from 1.29% and 1.35% in April and March respectively).

And Back to Tsipras

Greece finally delivered a post-referendum proposal, seeking a 3-year loan under ESM funding worth EUR 53.5 bn, including small pension reforms and higher corporate taxes, including the sale of regional airports. Initial reports stated the proposal is similar to that of the EU proposal from June 26, but the main difference is that the EU demands did not include debt-relief. Greek hardliners are likely to back Tsipras' proposal today. The ESM board will also vote for it today.

Sunday's EU Summit (if there is a need for it) starts at 15:00 BST with a working session, followed by the working dinner with heads of state at 17:45 BST. Our Premium long in EURCAD and EURAUD are currently netting 340 and 360 pips each. EURUSD long is flat and CADJPY is in a loss.

For more frequent FX & Commodity calls & analysis, follow me on Twitter Twitter.com/alaidi

By Ashraf Laidi
AshrafLaidi.com

Ashraf Laidi CEO of Intermarket Strategy and is the author of "Currency Trading and Intermarket Analysis: How to Profit from the Shifting Currents in Global Markets" Wiley Trading.

This publication is intended to be used for information purposes only and does not constitute investment advice.

Ashraf Laidi Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.