STIR: Powell Termination Considerations More Than Reverse Hawkish CPI Reaction

US President Donald Trump has delivered brief remarks to the press following a bilateral meeting with Canadian Prime Minister Mark Carney at the G7 leaders’ summit, which kicks off in earnest momentarily. 

• Trump says: “We’re going to be talking about trade and many other things,” noting that he has his “top economy people” with him in Canada. Says “we will accomplish a lot” and his “primary focus is trade and trade with Canada.”
• He says he doesn’t believe that anything is “holding up” a deal with Canada, but says “I have a tariff concept and Mark [Carney] has a different concept”. Trump affirms to the press that he believes a deal with Ottawa is possible within days or weeks.
• Trump says it was a “mistake” (citing former President Barack Obama and former Canadian Prime Minister Justin Trudeau) to eject Russia from the (former) G8, because “you wouldn’t have a war right now if Russia was in”. He later adds he “wouldn’t mind” China joining the group when prompted by a reporter.
• On tensions in the Middle East, Trump says he has heard from the Iranians “that they would like to talk,” adds: “They should have done this before… [but] Iran is not winning this war.”
• Trump says: “I don’t want to talk about that” when asked what it would take for the US to get involved in the war, militarily. He doesn’t rule it out, but that is consistent with his regular pronouncements on the issue. Trump doesn't confirm if the US is providing logistical support for Israel.     

• Despite a relatively subdued start to the week amid the more stable risk backdrop, USDJPY has still managed to establish a 110 pip range on the session, keeping attention on the pair high as we approach tomorrow’s BOJ decision and press conference, the release of May US retail sales and Wednesday’s FOMC meeting.
• Last Friday’s low print held short-term trendline support well, drawn from the May lows. A close above the 50-day EMA, intersecting around the 145.00 mark, would be a bullish development and signal scope for a stronger recovery to 145.46 (Jun 11 high) and key short-term resistance at 146.28, the May 29 high.
• However, overall, moving average studies are in a clear bear-mode position, highlighting a dominant downtrend. A resumption of weakness and a breach of the noted trendline would open 142.12, the May 27 low.
• The BOJ is set to hold the policy rate at 0.50% (preview here: https://mni.marketnews.com/3HWAUAB), and the key area of interest will be Governor Kazuo Ueda’s post-meeting press conference, where investors will closely examine his comments for any signals on the timing and likelihood of future rate hikes. If the BoJ begins to hint at stronger underlying inflationary trends or shows greater optimism about the economy, it could stoke expectations of a rate hike in the autumn.
• Additional commentary surrounding the bank’s JGB purchase program. If the BoJ chooses to maintain the current pace of ¥400 billion reductions per quarter in FY2026, this would be interpreted as a mildly hawkish move.

• Former Fed officials discuss this week's FOMC meeting and economic outlook -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com