This could be a crucial week for the markets, with the Fed, Bank of England and Bank of Japan holding policy meetings. China PMI, or Eurozone CPI, will also be in the spotlight on Wednesday. Friday’s US jobs report could cause extreme volatility.
The key data and events for this week (China Data to Drag Volatility)
Tuesday – US JOLTS Job, Consumer Confidence
- The Eurozone German Prelim CPI m/m will be closely watched. The reading is expected to higher by 0.3% compared to the previous 0.1%. That could weight on the Euro.
- The US CB Consumer Confidence will the important triggers to Watch. The number is foreseen at 99.8 compared to 100.4, while JOLTS Job Openings will be another important trigger to watch, that could have a volatile impact on the dollar.
Wednesday – FED Meeting, BOJ Meeting, Europe CPI
- Manufacturing PMI of China will drag volatility on Wednesday. The number is foreseen to at 49.3 slightly lower from the previous 49.5. That could weight on the Yuan.
- The BOJ concludes its latest policy setting meeting will be another important triggered for the market. Amid speculation over the prospect of a rate hike is mounting after high-profile politicians, including the prime minister, hinted at the need for near-term policy normalization. BOJ Policy Rate is at -0.10%.
- The impact of the weak yen on household and business spending appears to be turning the exchange rate into a central issue for the ruling Liberal Democratic Party’s leadership convention in September. The fact that the currency has rebounded by a staggering 10 yen per dollar from three-decade lows at the start of the month hasn’t deterred some from predicting a July hike.
- They argue the BOJ can get the most bang for its buck by hiking into a rallying yen. Others worry a fragile economy and weak consumer sentiment couldn’t weather higher borrowing costs, with slowing U.S. growth set to have a knock-on effect already.
- Eurozone CPI Flash Estimate data will important data after the central bank kept interest rates on hold at 3.75% in last meeting. The Core flash CPI is expected to cool off by 2.8% compared to previous 2.9%. while, CPI Flash Estimate at 2.4% from previous 2.5%. The number could be favorable for the Euro against the dollar.
- The US FOMC meeting will conclude on the same day, there will be a statement and a press conference led by Jerome Powell after that. Although expectation is to hold rate unchanged at 5.50%, the market will be looking for a clear signal that a rate cut is coming at the next meeting in September. The latest inflation data, the core PCE for June, slowed to its slowest pace in more than 3 years. Importantly for the Fed, personal income grew by a 0.2% rate last month, which could be a further sign that wage pressures are easing.
Thursday – BOE Policy Meeting, Weekly Unemployment claims
- The BoE meets on Thursday with anticipation divided over whether policymakers will deliver their first rate cut since 2020. The level of uncertainty is higher than usual in the run-up to the meeting as key central bank officials have not spoken publicly for over two months due to rules in the lead up to Britain’s July 4’s general election. Although, market is forecast to cut rate to 5.0% from 5.50%. That could weight on the Pound.
- US ISM Manufacturing PMI will be released. The number is forecasted at 49.00 compare to 48.50 previously.
- US Unemployment is said to be the next release of the day. The data is expected to increase by 239,000 compared to the previous week 235,000. This could have a stabilizing effect on the value of the dollar.
Friday – US Non-Farm Employment Change
- US Non-Farm Employment Change will be important data to watch. As the data will gauge whether recent signs of cooling in the labor market continued in July. The data is expected to decrease by 177k compare to expansion of 206k. While, Average Hourly Earnings m/m and Unemployment Rate foreseen unchanged at 0.3%, 4.1% respectively.
Happy Trading!
Commodity Samachar
Learn and Trade with Ease
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