FOMC to deliver its first rate cut in over ten years - TD Securities

Previewing next week's key macroeconomic events, "We expect the FOMC to deliver its first rate cut in over ten years, with a 25bp reduction in the Fed Funds target range," TD Securities analysts said.

"Given crosscurrents persist as a threat for the outlook and inflation remains subdued, we look for the Fed to leave the door open to further easing. We expect the statement to show modest, mark-to-market changes and for two of the FOMC voters to dissent."

"We look for the ISM index to stay unchanged at 51.7 for July, mostly reflecting an stabilization in the outlook for manufacturing. We also expect payrolls to trend lower to 170k in July, driven by a moderation in manufacturing employment and slower job creation in the services sector. The unemployment rate and wage growth should remain steady at 3.7% and 3.1% y/y, respectively."