Fed Chairman J. Powell and St. Louis Federal Reserve Bank Head J. Bullard synchronously lowered the estimate of the likelihood of a rate cut at the July meeting by 50 pts at once, which allowed the dollar to stop falling and go into the side range. Bullard said the 0.5% rate cut was unreasonable, and Powell added that acting in favor of big politics could lead to significant damage. CME futures responded immediately, with a 50p chance of a rate cut which decreased from 40% to 19%.

Stock markets look confident against the background of a softening of the Fed's rhetoric and reorientation towards stimulating a number of other major securities. Ten years ago, emergency measures allowed to stop the crisis, but this time, everything is somewhat more complicated. After lowering the rates, the world economy did not have enough time to recover enough to return rates to the previous level, so it is impossible to achieve a similar effect in the current conditions.

At the same time, the world economy continues to weaken, and the tariff wars here are not the reason. The global industrial cycle began a turnaround a year ago, that is, before the outbreak of trade wars, the cumulative PMI fell to its minimum level in 7 years in May.

Moreover, even a sudden decision on the Sino-American confrontation will not be able to change anything. Nordea Bank, noting a good correlation between ISM indices and a spread for 2- and 10-year treasures, concludes that by the beginning of 2020, that is, in half a year, the ISM index will firmly enter the zone 44-46p, i.e. into the recession zone.

As soon as the markets realize the full depth of the trend, a large-scale decline cannot be avoided. The record levels of stock indices are due to the reaction to the Fed's easing position, but the effect will be short. Gold has already reached the level of 6-year highs, and after the G20 meeting, nothing will restrain global markets from the beginning of the transition to the phase of a protracted decline.

EURUSD

Consumer sentiment in Germany, according to Gfk, fell in July to 9.8p. vs. 10.1p a month earlier, the key factor in the decline is the deterioration of expectations for future income. The negative result was obtained against the background of a confident labor market, therefore, the expected passage of a peak in employment is capable of bringing the index down further.

Mario Draghi made it clear last week that in the absence of improvements, new incentives would be needed. There are no improvements, and therefore the markets tend to expand the stimulus package at a meeting in September, which will consist of reducing the deposit rate by 10p., Expanding the asset repurchase program by 30 or even 60 billion euros per month.

The reasons that were also mentioned include the harsh Brexit, the US trade war against all, stagnation in German industry, political uncertainty in Italy, and falling inflation. All these are undoubtedly important factors, but the main factor will be the global slowdown and the reluctance on this background of the ECB to allow the euro to rise.

In the previous review, we assumed that EURUSD will develop growth, which eventually happened. On Wednesday morning, the markets are moving into the phase of waiting for the outcome of the G20 summit, so the euro is likely to trade in a range where the support will be the area of 1.1337 / 46, resistance 1.1400 / 10.

GBPUSD

Retail sales in the UK, according to CBI, fell in June at the fastest pace since March 2009, a decline of 42% from May. Given the apparent loss of upward momentum on consumer inflation, the risks for a decrease in the pound are growing.

The pound looks weaker than the euro and will be traded in the range of 1.2616 ... 1.2715 with a pounding to its lower limit. New introductory may arrive on Friday, where a large package of macroeconomic statistics will be published and the first news from the G20 meeting will appear.