BOC: MNI BoC Review-July 2025: Dour Outlook Keeps Door Open To Cuts

• @realDonaldTrump
• Jerome “Too Late” Powell, and his entire Board, should be ashamed of themselves for allowing this to happen to the United States. They have one of the easiest, yet most prestigious, jobs in America, and they have FAILED — And continue to do so. If they were doing their job properly, our Country would be saving Trillions of Dollars in Interest Cost. The Board just sits there and watches, so they are equally to blame. We should be paying 1% Interest, or better!

Goldman Sachs analysts now see Fed rate cuts resuming in September ("odds...somewhat above 50%"), vs a prior view of December. They now see 3 25bp cuts this year in Sep, Oct, and Dec, with 2 more cuts in 2026 to a terminal rate of 3-3.25%.

• That's a total of 5 cuts - as of the June FOMC they'd only seen 3 cuts to a terminal 3.5-3.75%. Going into the June FOMC we'd estimated the analyst "median" expectation of cuts through 2026 at 112.5bp, so they go from being on the more hawkish to the more dovish end of consensus.
• They write: "We had previously expected a cut in December because we thought that the peak summer tariff effects on monthly inflation would make it awkward to cut sooner. But the very early evidence suggests that the tariff effects look a bit smaller than we expected, other disinflationary forces have been stronger, and we suspect that the Fed leadership shares our view that tariffs will only have a one-time price level effect. And while the labor market still looks healthy, it has become hard to find a job, and both residual seasonality and immigration policy changes pose near-term downside risk to payrolls."
• Their view has changed a few times: leading up to the May FOMC they'd expected a July cut and 3 total reductions by end-2025. Just before that they'd seen the first cut in June.

• RES 4: 1.1923 2.000 proj of the Feb 28 - Mar 18 - 27 price swing
• RES 3: 1.1821 High Sep 16 2021
• RES 2: 1.1783 1.764 proj of the Feb 28 - Mar 18 - 27 price swing
• RES 1: 1.1768 High Jun 27
• PRICE: 1.1767 @ 16:56 BST Jun 30
• SUP 1: 1.1631 High Jun 12 and a recent breakout level
• SUP 2: 1.1529 20-day EMA
• SUP 3: 1.1446 Low Jun 19  
• SUP 4: 1.1373 50-day EMA

The trend set-up in EURUSD remains bullish and this week’s early gains reinforce the uptrend. Resistance and a bull trigger at 1.1631, the Jun 12 high, has been cleared. This confirms a resumption of the trend and sights are on 1.1783, a Fibonacci projection. Key short-term support to watch lies at 1.1529, the 20-day EMA. A clear break of this average is required to signal scope for a deeper retracement.