Staff of Reuters Dhara Ranasinghe takes a peek at the day ahead in 3 minutes. PHOTO FROM THE FILE: On March 19, 2019, the Federal Reserve Board building on Constitution Avenue in Washington, D.C. is photographed. Leah Millis/Reuters The Federal Reserve of the United States is sticking to its credo that inflation is temporary and that there is no need to tighten policy, while others are concerned. On Thursday, Michael Saunders became the second Bank of England rate-setter in two days to suggest that when inflation rises, it may be time to consider reducing support. Canada and New Zealand’s central banks made steps toward withdrawing post-crisis support earlier this week. It’s little wonder, then, that two-year gilt yields jumped 6 basis points after the Bank of England’s remarks on Thursday, the largest one-day gain since February. Fed Chairman Jerome Powell’s dovish language, on the other hand, continues to hold down US bond yields. However, another round of good data could put the Fed’s commitment to the test; data due later this session is expected to show that U.S. retail sales rose in June after falling in May. Meanwhile, equities markets are fighting to maintain their composure in the face of a global increase in coronavirus infections. Japan’s Nikkei stock average dipped below the psychologically important 28,000 level, while MSCI’s Asia market index, excluding Japan, was down 0.3 percent at the time of writing. Stock futures in Europe and the United States were mixed. The dollar was on track to post its highest weekly rise in over a month, aided by investors’ desire for safety. After a compromise accord between key OPEC producers and a surprise disappointing weekly data on US fuel demand, oil prices were somewhat lower. [O/R] Markets should have more direction on Friday as a result of the following key developments: – The Bank of Japan lowers its growth projection and announces a climate-change plan. – Ericsson Q2 earnings fall short of expectations; Burberry declares a “great start” to the new year, with full-price sales increasing; Puma raises its forecast for 2021 nASN001G8Y] – Car registrations in Germany – Information about bond sales in the United States – Events at the Federal Reserve: New York Fed President John Williams gives a speech. – Earnings in the United States: State Street, Honeywell, and General Electric – Sandvik, Adtech, Husquarna, Handelsbanken, Swedbank, Richemont trading statement, European earnings -Fitch will conduct a review of Greece’s credit rating. Bond yields in the United Kingdom and the United States are depicted graphically. -Dhara Ranasinghe contributed reporting, and Sujata Rao edited the piece./n
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