What are the main events for today?

Wow, what a brutal day we are having in the markets. On the data front, we don’t have much on the agenda as we will just get the final European and UK Services PMI readings in the European session, and the US ISM Services PMI in the American session.

I don’t think the market will care much about the data today and it’s going to be all about flows. The market will likely focus more on what Fed speakers have to say. We have Fed’s Goolsbee and Fed’s Daly today.

The Fed generally sends a member of the troika (Fed Chair, Vice Chair and NY Fed President) to reassure the market or correct a previously misinterpreted comment, but I guess these moves are not enough to make them panic yet.

The problem is that the market might not like neutral comments from Fed speakers now and will want to hear a commitment to rate cuts.

14:00 GMT/10:00 ET – US July ISM Services PMI

The US ISM
Services PMI is expected at 51.0 vs. 48.8 prior. This survey hasn’t been giving
any clear signal lately as it’s just been ranging since 2022. The latest S&P Global US Services
PMI rose to the
highest level in 28 months. The good news in the report was that “the rate of
increase of average prices charged for goods and services has slowed further, dropping
to a level consistent with the Fed’s 2% target”.

The bad news was
that “both manufacturers and service providers reported heightened
uncertainty around the election, which is dampening investment and hiring. In
terms of inflation, the July survey saw input costs rise at an increased rate,
linked to rising raw material, shipping and labour costs. These higher costs
could feed through to higher selling prices if sustained or cause a squeeze
on margins.”

Central bank speakers:

• 12:30 GMT/08:30 ET – Fed’s Goolsbee (dove – non voter).
• 21:00 GMT/17:00 ET – Fed’s Daly (neutral – voter).

This article was written by Giuseppe Dellamotta at www.forexlive.com.