EUROPEAN SESSION
In the European session, we have the Eurozone Q2 GDP, the German CPI and the BoE rate decision. The Eurozone Q2 GDP is expected at 0.2% vs -0.2% prior. The data shouldn’t change much for the ECB as it’s more focused on inflation.
Speaking of inflation, we get both the German state inflation readings and the national CPI. We will also get the Spanish inflation figures, but the German data is generally more market-moving because it carries more weight in the Eurozone CPI calculations. The German CPI Y/Y is expected at 2.7% vs 2.3% prior, but the focus will be on the core measure.
Lastly, we have the Bank of England rate decision. The central bank is expected to hold the Bank Rate unchanged at 3.75% with a 7-2 vote split (Pill and Greene voting for a hike). The guidance in the statement will likely remain unchanged with the committee reitarating that it “stands ready to act as necessary to ensure that CPI inflation remains on track to meet the 2% target in the medium term”. A removal of “as necessary” would be taken as a hawkish signal for an imminent rate hike. The BoE will also release the updated quarterly projections at this meeting.
AMERICAN SESSION
In the American session, we have the US Q2 GDP, the US PCE price index and the US Jobless Claims data. The Q2 GDP is expected at 2.0% vs 2.1% prior. The data won’t change anything for the Fed as it’s laser focused on inflation and the next CPI report will decide whether the Fed hikes in September or not.
The US PCE Y/Y is expected at 3.3% vs 3.4% prior, while the M/M measure is seen at -0.1% vs 0.4% prior. The Core PCE Y/Y is expected at 3.3% vs 3.4% prior, while the M/M figure is seen at 0.2% vs 0.3% prior. The PCE is rarely a major market-moving release because it’s mostly “old news” as it can be accurately forecasted using inputs from the CPI and PPI reports.
The US Initial Claims are expected at 200K vs 187K prior, while Continuing Claims are seen at 1795K vs 1796K prior. Again, the Fed is focused on inflation, so this is unlikely to be market-moving unless we get very big deviations. The US labour market remains stable.
This article was written by Giuseppe Dellamotta at investinglive.com.
SOURCE LINK : What are the main events for today?
