TO CUT, OR NOT TO CUT, THAT IS THE QUESTION

Edito Past week was marked by some rathe contradictory signals for markets, ranging from a “dovish” stance of the central banks to several macroeconomic statistic releases exceeding expectations. Indeed, during his US Congress testimony Fed’s Chairman Jerome Powell seemed open to future Fed Fund rate cuts, highlighting the risks of the trade war, the slowdown in job creations and a sustained low inflation rate. Yet, the CPI inflation came out well above the consensus in June, reaching 2.1% in GA for the core. In addition, on the European side, industrial production surprised on the upper side in France and in Italy, which weighed on long-term rates. Could these latest economic developments alternate the position of the Fed and the ECB? Follow the answers on 25 and 31 July!