U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 7.6 million barrels from the previous week. At 495.4 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year.

Total motor gasoline inventories decreased by 1.6 million barrels last week, but are in the upper half of the average range. Finished gasoline inventories increased while blending components inventories decreased last week.

Distillate fuel inventories increased by 3.1 million barrels last week and are above the upper limit of the average range for this time of year. Propane/propylene inventories increased by 1.7 million barrels last week but are in the lower half of the average range. Total commercial petroleum inventories decreased by 3.9 million barrels last week.

• Raises U.S. 2017 growth forecast to 2.2 pct from 2.1 pct, removes stimulus from expansionary U.S. fiscal policy assumed in earlier forecast

• Elevated geopolitical uncertainty still clouds global outlook, particularly for trade, investment

• Household spending likely to remain solid in months ahead, but pace is expected to slow over projection horizon

• Activity in housing sector has abated, largely as result of sharp declines in resales in toronto and surrounding area

• Growth is broadening across industries, regions and becoming more sustainable; adjustment to lower oil prices is largely complete

• Further adjustments to o/n rate will be guided by incoming data, keeping in mind continued uncertainty, financial system vulnerabilities

• Judges recent softness in inflation to be temporary, sees inflation close to 2 pct by mid-2018

"The Bank of Canada is raising its target for the overnight rate to 3/4 per cent. The Bank Rate is correspondingly 1 per cent and the deposit rate is 1/2 per cent. Recent data have bolstered the Bank's confidence in its outlook for above-potential growth and the absorption of excess capacity in the economy. The Bank acknowledges recent softness in inflation but judges this to be temporary. Recognizing the lag between monetary policy actions and future inflation, Governing Council considers it appropriate to raise its overnight rate target at this time.

The global economy continues to strengthen and growth is broadening across countries and regions. The US economy was tepid in the first quarter of 2017 but is now growing at a solid pace, underpinned by a robust labour market and stronger investment. Above-potential growth is becoming more widespread in the euro area. However, elevated geopolitical uncertainty still clouds the global outlook, particularly for trade and investment. Meanwhile, world oil prices have softened as markets work toward a new supply/demand balance.

Canada's economy has been robust, fuelled by household spending. As a result, a significant amount of economic slack has been absorbed. The very strong growth of the first quarter is expected to moderate over the balance of the year, but remain above potential. Growth is broadening across industries and regions and therefore becoming more sustainable. As the adjustment to lower oil prices is largely complete, both the goods and services sectors are expanding. Household spending will likely remain solid in the months ahead, supported by rising employment and wages, but its pace is expected to slow over the projection horizon. At the same time, exports should make an increasing contribution to GDP growth. Business investment should also add to growth, a view supported by the most recent Business Outlook Survey".

EURUSD: 1.1350 (EUR 405m) 1.1365-75 (890m) 1.1400 (660m) 1.1425-30 (1.1bln) 1.1450 (380m) 1.1500 (330m)

USDJPY: 112.50 (USD 185m) 112.70 (300m) 113.00 (380m) 113.30 (350m) 113.80(400m) 114.00 (325m)

GBPUSD: 1.2900 (GBP 300m) 1.3000 (545m)

EURGBP: 0.8860-70 (EUR 780m)

USDCHF: 0.9525 (USD 365m)

AUDUSD: 0.7530-40 (AUD 480m) 0.7600 (430m) 0.7625 (290m)

EURJPY: 129.00 (EUR 250m) 131.00 (180m)

• Proper size of balance sheet depends on 'as-yet-unknown factors' including future demand for bank reserves

• Fed would not need to raise rates 'all that much further' to reach current low estimates of the neutral Fed funds rate

• Economy picked up in second quarter aided by household spending, business investment and stronger global economy

• 'Roughly equal odds' of faster versus slower growth than fed currently projects

• Carefully montoring inflation though ascribes recent dip to 'a few unusual' price declines for particular items

• Brexit fisheries talks part of second phase of talks, EU will defend its interests

• UK must respect its international commitments on sea and fisheries

• Expect annual inflation to slow in q4 2017

• See higher inflation pressure in h1 2018 due to 2017 harvest losses

• Analysts are confident inflation would slow to 4 pct target by end of 2017

• Expect gdp growth at no less than 1.5 pct in 2017

In May 2017 compared with April 2017, seasonally adjusted industrial production rose by 1.3% in the euro area (EA19) and by 1.2% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In April 2017 industrial production rose by 0.3% in euro area and by 0.1% in the EU28. In May 2017 compared with May 2016, industrial production increased by 4.0% in both zones.

The increase of 1.3% in industrial production in the euro area in May 2017, compared with April 2017, is due to production of capital goods rising by 2.3%, durable consumer goods by 1.8%, non-durable consumer goods by 1.2%, energy by 0.9% and intermediate goods by 0.3%. In the EU28, the increase of 1.2% is due to production of capital goods rising by 2.0%, durable consumer goods by 1.8%, non-durable consumer goods by 1.0%, energy by 0.7% and intermediate goods by 0.6%. Among Member States for which data are available, the highest increases in industrial production were registered in Lithuania (+3.8%), Romania (+3.5%) and the Czech Republic (+3.3%), and the largest decreases in Portugal (-1.0%) and Malta (-0.9%).

Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.1% including bonuses, and by 1.7% excluding bonuses, compared with a year earlier.

Estimates from the Labour Force Survey show that, between November 2016 to January 2017 and February to April 2017, the number of people in work increased, the number of unemployed people fell, and the number of people aged from 16 to 64 not working and not seeking or available to work (economically inactive) also fell.

There were 31.95 million people in work, 109,000 more than for November 2016 to January 2017 and 372,000 more than for a year earlier.

The employment rate (the proportion of people aged from 16 to 64 who were in work) was 74.8%, the joint highest since comparable records began in 1971.

There were 1.53 million unemployed people (people not in work but seeking and available to work), 50,000 fewer than for November 2016 to January 2017 and 145,000 fewer than for a year earlier.

The unemployment rate (the proportion of those in work plus those unemployed, that were unemployed) was 4.6%, down from 5.0% for a year earlier and the joint lowest since 1975.

EURUSD: 1.1350 (EUR 405m) 1.1365-75 (890m) 1.1400 (660m) 1.1425-30 (1.1bln) 1.1450 (380m) 1.1500 (330m)

USDJPY: 112.50 (USD 185m) 112.70 (300m) 113.00 (380m) 113.30 (350m) 113.80(400m) 114.00 (325m)

GBPUSD: 1.2900 (GBP 300m) 1.3000 (545m)

EURGBP: 0.8860-70 (EUR 780m)

USDCHF: 0.9525 (USD 365m)

AUDUSD: 0.7530-40 (AUD 480m) 0.7600 (430m) 0.7625 (290m)

EURJPY: 129.00 (EUR 250m) 131.00 (180m)

• Potential for renewed market volatility from changing monetary conditions, unexpected turns in China's economic rebalancing

• There's uncertainty about direction of economic policy in some advanced economies, especially risk of inward-looking policies

EUR/USD

Resistance levels (open interest**, contracts)

$1.1571 (2743)

$1.1542 (2976)

$1.1524 (748)

Price at time of writing this review: $1.1465

Support levels (open interest**, contracts):

$1.1397 (1320)

$1.1364 (1766)

$1.1326 (2379)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date August, 4 is 60651 contracts (according to data from July, 11) with the maximum number of contracts with strike price $1,1500 (3879);

GBP/USD

Resistance levels (open interest**, contracts)

$1.2988 (1662)

$1.2964 (991)

$1.2928 (763)

Price at time of writing this review: $1.2821

Support levels (open interest**, contracts):

$1.2764 (605)

$1.2734 (2394)

$1.2700 (1647)

Comments:

- Overall open interest on the CALL options with the expiration date August, 4 is 23996 contracts, with the maximum number of contracts with strike price $1,3100 (2869);

- Overall open interest on the PUT options with the expiration date August, 4 is 22399 contracts, with the maximum number of contracts with strike price $1,2800 (2394);

- The ratio of PUT/CALL was 0.93 versus 0.94 from the previous trading day according to data from July, 11

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

The Westpac Melbourne Institute Index of Consumer Sentiment rose by 0.4% in July from 96.2 in June to 96.6 in July.

This is the eighth consecutive month where the Index has printed below 100 indicating that pessimists continue to outnumber optimists. The Index is not sending encouraging signals about the outlook for consumer spending. Having said that, developments around interest rates during the month could have been much more damaging for confidence than turned out to be the case. Banks increased rates on 'interest only' mortgages while there was considerable media speculation about prospects for rising rates overall.

As reported by the Federal Statistical Office (Destatis), the selling prices in wholesale trade increased by 2.5% in June 2017 from the corresponding month of the preceding year. In May 2017 and in April 2017 the annual rates of change were +3.1% and +4.7%, respectively.

From May 2017 to June 2017 the index did not change.

(pare/closed(GMT +2)/change, %)

EUR/USD $1,1464 +0,58%

GBP/USD $1,2845 -0,26%

USD/CHF Chf0,9635 -0,22%

USD/JPY Y113,95 -0,10%

EUR/JPY Y130,63 +0,49%

GBP/JPY Y146,37 -0,36%

AUD/USD $0,7635 +0,41%

NZD/USD $0,7221 -0,65%

USD/CAD C$1,2919 +0,25%