Week Ahead for FX, Bonds: Fed Minutes in Focus

Markets heading into the week starting July 6 are likely to hinge on central-bank signals for FX and bonds, with U.S. Federal Reserve minutes set as the key catalyst. The minutes will be released on Wednesday, under new Fed Chair Kevin Warsh, after rates were left unchanged at 3.5% to 3.75%. Investors will look for more clarity on whether and when U.S. interest rates could rise, especially given Warsh’s focus on inflation and shifting commentary about easing risks. The backdrop includes weaker-than-expected June jobs data, with only 57,000 jobs created, even as unemployment edged lower. Traders are fully pricing a 25 basis-point hike in December, while LSEG data also show risk of an earlier move in October. The week also includes ECB minutes, regional inflation releases in Asia, and scheduled U.S. Treasury auctions totaling $58 billion in three-year notes, $39 billion in 10-year notes, and $22 billion in 30-year bonds.