ING offers insights into what can be anticipated from the upcoming July Federal Reserve minutes, with particular emphasis on the Federal Reserve's efforts to offset dovish market expectations.

Key Points:

1. Hawkish Stance Against Dovish Expectations:

   • The FOMC minutes set to be released later today are expected to highlight the Federal Reserve's hawkish efforts aimed at countering dovish market anticipations.

2. Anticipation Ahead of the Jackson Hole Symposium:

   • Today's release is perceived as the last significant Federal Reserve event before the much-anticipated Jackson Hole symposium scheduled for next week.

3. Shift in the Implied Policy Rate:

   • Over the past month, there has been a notable upward movement of approximately 50-60bp across almost the entire yield curve. The sole exception remains the ultra-short-term horizon.

4. Market Reaction to Hawkish News:

   • ING anticipates that there's limited time before the Federal Reserve exhausts its hawkish narratives and the market becomes less responsive to more hawkish updates.

5. Support for the US Dollar:

   • The ongoing hawkish mode, combined with positive economic surprises, is anticipated to bolster the US dollar. ING predicts that the DXY index will not only remain above the 103.00 mark but might also approach levels closer to 103.50 today.

Summary:

According to ING, the imminent FOMC minutes are expected to resonate with the Federal Reserve's hawkish efforts, aiming to counterbalance dovish market sentiments. This stance, coupled with positive economic data, should further underpin the strength of the US dollar, possibly pushing the DXY index towards the 103.50 range in the near term.