Crude prices slumped more than 4 percent yesterday, with Brent futures reaching a three-month low as Libyan ports reopened and traders eyed potential supply increases by Russia and other producers. Concerns over China’s second-quarter economic growth also weighed on oil prices. The country’s economy expanded at a slower pace as Beijing’s efforts to contain debt hurt activity, while June factory output growth weakened to a two-year low. But Brent has gained about 7.5 percent in 2018, during which it poked above $80.00 a barrel in May to a three and a half year high.
Powell will testify on the economy and monetary policy before the U.S. Senate Banking Committee on Tuesday, followed by testimony on Wednesday to the House of Representatives Financial Services Committee, according to Reuters. The Fed is expected to reiterate Fed’s gradual monetary policy tightening, although any suggestion of rising inflation being a serious concern would mean faster rate hikes and a higher neutral rate and hence could yield a broad-based rally in the USD.
Coming up today GBP pairs could turn volatile after the release of the monthly UK wage growth numbers. Average Earnings including bonuses is expected to grow by 2.5% for the first quarter of 2018, while Average Earnings without bonuses is expected to lift by 2.7%. At the same time, Unemployment readings are expected to remain steady at 4.2%. Just ahead of the data release is BOE governor Mark Carney’s speech.