Market Comment | Central banks' monetary policies in the spotlight

Summary

The run up to next week’s FOMC meeting has seen markets trim bets of an aggressive Fed rate cut of 50bps in July. Meanwhile, the ECB delivered yesterday a reasonably dovish tone, although still disappointing markets expectations, which were ultra-dovish.

Key points

• Key points:
• The ECB delivered a reasonably dovish tone, although still disappointing markets expectations.
• The U.S. economy grew more than expected in the second quarter, although at a slower pace.
• The US and German long-term yields diverged.
• The USD DXY strengthened across the board.

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