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Meme Stock Frenzy & ECB Preview





Bank of Canada keeps key rate unchanged, sees growth picking up this year


The bank reiterated its guidance that rates would remain unchanged until at least the second half of 2022, noting there remained considerable excess in the economy. The central bank plans to maintain its current policy of quantitative easing. It is aiming to buy C$3 billion of government bonds a week as part of attempts to aid the recovery.


Sterling falls as EU-UK "sausage war" standoff continues


The pound fell against the dollar on Wednesday, as Britain and the European Union failed to agree on solutions to post-Brexit trade problems in Northern Ireland, and exchanged threats in a standoff that could claim the G7 international summit.


The row has been dubbed the “sausage war” by British media because it affects the movement of chilled meats from Britain to Northern Ireland.


Dollar inches lower as focus turns to upcoming data, ECB meeting


The dollar was slightly weaker on Wednesday as investors focused on a European Central Bank meeting and the upcoming U.S. consumer price index report to gauge the current pace of the economic recovery. Both are due Thursday, and investors have adopted a wait-and-see attitude, leaving major currencies mostly range-bound recently.




S&P 500 teases record closing high as retail frenzy churns


The S&P 500 hovered near a record closing high on Wednesday, as institutional investors looked to coming inflation data for clues as to when the U.S. Federal Reserve might tighten its dovish monetary policy. 


The churn of favored "meme stocks," or heavily shorted stocks involved in a social media-driven retail frenzy, continued its rotation, with Aethlon Medical soaring by 429.9%. Also benefiting from Reddit chatter, prison operator GEO Group, and World Wrestling Entertainment jumping by 50.9% and 10.4%, respectively. 




Oil Dips as Growing U.S. Fuel Supplies Cloud Summer Rebound


Oil closed lower as an increase in U.S. fuel stockpiles clouded the outlook for a strong demand rebound during the summer driving season. Domestic gasoline stockpiles rose by more than 7 million barrels last week, the most since April 2020, and distillate inventories also increased, according to a U.S. government report. 


Gold range-bound as market awaits U.S. inflation cues


Traders will scan Thursday’s U.S. consumer price index report for any signs the Fed could begin to step back from its ultra-loose monetary policy. Market participants are also awaiting a European Central Bank meeting on the same day. Gold is considered a hedge against inflation likely spurred by large stimulus from central banks and governments around the world.




•    U.S. Fed's reverse repo volume surges to record half a trillion dollars
•    Treasury Yields Slip Below 1.5% as Inflation Fears Ebb
•    Czech health ministry recommends AstraZeneca, J&J jabs only for over-60s
•    Mexico's president taps finance minister to head central bank
•    Newest Meme Stocks Extend Gains With No Sign of Craze Fading
•    Facebook says on track to reopen all U.S. offices by October
•    CME's micro Treasury futures offer simplicity with yield focus




ECB Preview: The balance of risks is modestly skewed to a higher euro – ING


“Given the expectations of no change in guidance on asset purchases, the balance of risks is modestly skewed to a higher EUR, should the press conference not reiterate the tapering on hold message strongly enough or deliver some communication missteps. While not our base case, the probability of this outcome is higher than of an even more dovish message vs the current, already cautious, market expectations. Hence the balance of risks is skewed to modestly higher EUR/USD, even if our base case is for a largely unaffected euro after the meeting.”




Euro-yen currency pair - Weekly Candlesticks


Source: GKFX Metatrader 4 

EUR/JPY has held former resistance at the 133 level as support but for now remains under the next round number at 134. A move under 133 could open up a bigger pullback of the large rally since May 2020. - Prepared by Trading Writers*




*Times in GMT


Source: FX Street Economic Calendar



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