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December Fed Hike Odds Jump to 89%

Markets have priced in nearly an 89% chance of a Fed hike in December, up from 61% before last week’s FOMC meeting, according to the CME FedWatch tool.

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Fed Rate Hike Bets Could Cap Gold’s Upside

Markets are increasingly betting on a US rate hike this year after new Fed Chair Kevin Warsh delivered a hawkish message on inflation at his first policy meeting. That may act as a headwind for Gold. Although the metal is widely seen as an inflation hedge, its lack of yield tends to reduce its appeal when interest rates move higher.

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CAD CPI Print

  • Canada inflation rose 3.2% in May from 2.8% in April, with prices up 1.0% monthly.
  • Core inflation reached 2.2%, showing underlying price pressures remain sticky and easing has stalled.
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Goldman Sachs Forecast for U.S

Goldman Sachs cuts 12-month recession risk estimate in the #US to 15% (prev. 25%)

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GBP Supported by BOE, Capped by UK Political Risk

  • UK political risk is back in focus, with speculation around a possible Labour leadership change in mid-July adding fresh uncertainty for GBP traders.
  • From a market perspective, any leadership transition risk could keep sterling sentiment cautious, especially if investors start pricing in policy or fiscal uncertainty.
  • On rates, the next BOE meeting on July 30 is widely expected to be a hold, with policymakers still leaning cautious rather than clearly dovish.
  • Bailey’s message remains relatively hawkish, as inflation risks and energy uncertainty are still keeping the BOE from signaling an easy shift toward cuts.
  • For traders, that means GBP may stay supported by steady rate expectations, but political headlines could limit upside and increase short-term volatility.
  • Bottom line: BOE policy is still a GBP support factor, but UK political uncertainty is becoming an added risk for sterling positioning.
• برطانیہ کا political risk پھر سے توجہ میں آ گیا ہے، اور mid-July میں Labour leadership change کی قیاس آرائیاں GBP traders کے لیے نئی uncertainty پیدا کر رہی ہیں۔

• market کے لحاظ سے، اگر leadership transition کا risk بڑھتا ہے تو sterling کے بارے میں sentiment محتاط رہ سکتا ہے، خاص طور پر اگر investors policy یا fiscal uncertainty کو pricing in کرنا شروع کر دیں۔

• rates کے حوالے سے، 30 July کو ہونے والی اگلی BOE meeting میں عام توقع یہی ہے کہ hold ہوگا، کیونکہ policymakers ابھی بھی واضح طور پر dovish ہونے کے بجائے cautious رہنے کی طرف مائل ہیں۔

• Bailey کا پیغام اب بھی کافی hawkish ہے، کیونکہ inflation risks اور energy uncertainty کی وجہ سے BOE ابھی cuts کی طرف آسانی سے اشارہ دینے کے موڈ میں نہیں۔

• traders کے لیے اس کا مطلب یہ ہے کہ steady rate expectations کی وجہ سے GBP کو support مل سکتا ہے، لیکن political headlines اوپر جانے کی گنجائش محدود کر سکتی ہیں اور short-term volatility بڑھا سکتی ہیں۔

• خلاصہ یہ ہے کہ BOE policy اب بھی GBP کے لیے ایک support factor ہے، لیکن UK political uncertainty اب sterling positioning کے لیے ایک اضافی risk بنتی جا رہی ہے۔

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