EUROPEAN SESSION

In the European session, we don’t have anything on the agenda today, so the price action might remain mostly rangebound as traders await the US CPI report on Wednesday and further US-Iran developments. 

Keep in mind that the market sentiment improved somewhat on Friday after Trump ruled out strikes on Iran before the November elections. Nevertheless, Iran said yesterday that the US’s response to its proposal to reopen the Strait of Hormuz was insufficient.

Tehran had outlined seven conditions for restoring normal maritime passage within seven days and said some points remained unresolved. Negotiations through intermediaries continue.

AMERICAN SESSION

In the American session, it’s going to be another snoozefest with nothing on the calendar. The focus this week will be on the US CPI report on Wednesday. Headline inflation is expected to jump to 3.7% y/y from 3.4%, while core CPI is seen to increase to 2.5% from 2.4%.

Given the recent pushback from Fed’s Williams and Fed’s Jefferson, we will likely need an upside surprise to trigger a hawkish repricing and bring an October rate hike back on the table. 

Keep in mind that today is a US holiday. The stock market will be open but the bond market will be closed, so liquidity conditions will be thinner. 

CENTRAL BANK SPEAKERS

• 09:30 GMT/05:30 ET – BoE’s Breeden (neutral – voter)
• 12:50 GMT/08:50 ET – BoE’s Mann (hawkish – voter)
• 16:10 GMT/12:10 ET – Fed’s Hammack (hawkish – voter)

This article was written by Giuseppe Dellamotta at investinglive.com.



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