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Dow trades at record high, oil gains as Hurricane Barry threatens Gulf Coast


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The US stocks went to the moon and back as the Federal Reserve (Fed) Governor Jerome Powell strongly hinted that an interest rate cut is imminent at his semiannual testimony before the congress. The global economic slowdown outweighs the good data in the US, according to Powell. Also, the Feds chief thinks that the relationship between jobs and inflation weakened over time, meaning that a solid labour market would not necessarily mean a stronger inflation outlook. In other words, the fact that the US unemployment rate stands at a fifty-year low will not hold the Fed back from lowering the interest rates. With one remark though. The US core inflation rose from 2.0% to 2.1% y-o-y in June, even though the headline inflation eased from 1.8% to 1.6% y-o-y as expected by analysts.

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US June factory-gate prices are due today. A similar positive surprise may lead to a further correction in the US bond markets, but investors will keep in mind that an upturn in inflation, if not significant, will not influence the Feds dovish plans.

Read the ull LCG Report

https://www.lcg.com/int/analysis-education/market-reports/articles/dow-at-record-oil-up-on-hurricane-barry/

Opening calls

FTSE to open 30 points higher at 7540

DAX to open 43 points higher at 12375



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About the author


Ipek Ozkardeskaya is a senior analyst at MBAex with a solid experience in the financial industry. She has strong technical background in economics and quantitative finance. Previously, she worked as a senior market analyst in London Capital Group, FX strategist in Swissquote Bank and as a client sales executive at HSBC Private Bank in Geneva. She also developed quantitative models in automatic trading as part of BCV’s Structured Products team. Ipek has a Master’s degree in Financial Engineering & Risk Management and a Bachelor degree in Economics from University of Lausanne.
 
Contributing  author since 11/09/2017

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