The dollar is marginally lower on the day as market moves to start the week has been relatively minor and choppy. Equities are in a good spot though as the S&P 500 climbed by nearly 1% yesterday, closing the day at its highest levels since April last year. That is keeping the bulls more upbeat ahead of the main events this week and they could yet be vindicated for their optimism.
As we look towards the Fed policy decision tomorrow, broader markets are all going to be interconnected in the next few days. During the Fed's most hawkish orientation last year, it was a case of buy the dollar, sell everything else. But as we look towards the supposed pivot now, any dovish confirmation should see a case of sell the dollar, buy everything else instead.
In other words, we're at the point where there might be a reversal in the market and trading narrative.
For now, the Fed insists that they are just "skipping" a meeting. So, they will have to deliver a hawkish pause of sorts tomorrow to reaffirm that. However, we'll see if markets will buy into that story. And things are going to be made more complicated by the dot plots and economic projections surely.
Looking ahead today, it's all about the US CPI data mostly. In the UK, we'll get the payrolls change for May and it will be one to watch for sterling. In April, we saw the first monthly decline in payrolls since February 2021. Is that a sign that the economic pinch is starting to hit the jobs market? Only time will tell.
0600 GMT - Germany May final CPI figures
0600 GMT - UK May payrolls change, claimant count change
0600 GMT - UK April ILO unemployment rate, employment change
0600 GMT - UK April average weekly earnings
0700 GMT - Spain May final CPI figures
0900 GMT - Germany June ZEW survey current conditions, economic sentiment
1000 GMT - US May NFIB small business optimism index
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.