Market wrap up

80% of market participants believe there’s a chance of a rate cut in September.

By Nadia Elbilassy | @Nadia Elbilassy | 9 July 2024

Market close
  • Powell’s Testimony: Fed Chair Jerome Powell will testify on Capitol Hill on Tuesday and Wednesday, his last scheduled address before the presidential election, defending the central bank's policy stance and independence.

  • CPI Data: This week’s CPI data is anticipated to show the smallest consecutive monthly gains in underlying inflation since August.

  • Nikkei Record High: The Nikkei index surged by 2.3% on Tuesday, reaching a record high, driven by gains in semiconductor shares.

Powell’s testimony

The Fed chair will appear on Capitol Hill this Tuesday and Wednesday for his semiannual testimony, more than two years after initiating rate hikes to combat rising inflation. These hearings represent Powell’s final scheduled address to Congress before the presidential election, during which he will likely need to defend the central bank’s higher-for-longer policy stance and assert its independence from political influence.

Another highlight for the week will be CPI data that’s expected to is expected to reveal that underlying inflation experienced the smallest consecutive monthly gains since August.

Nikkei notches record high

Meanwhile in Japan, the Nikkei reached a record high on Tuesday, while investors elsewhere anxiously awaited Federal Reserve Chair Jerome Powell's comments to see if he would indicate support for rate cuts following signs of a cooling U.S. labor market.

The Nikkei index surged by 2.3% to reach a record high, driven by gains in semiconductor shares.

Political gridlock

In currencies, the euro held on to gains near 1.08200 after hitting lows overnight over a potential political gridlock.