Focus This week, the markets will be closely monitoring several key economic indicators as August comes to a close, which could significantly influence currency movements and central bank decisions. U.S. inflation data will likely underline expectations for long awaited rate cuts, while the Eurozone and Australia are also to release inflation data that will inform the trajectory of interest rates.
The key data and events for Focus this week, US PCE, Eurozone CPI and Japan data
Tuesday – U.S. Consumer Sentiment
- The U.S. Consumer Sentiment data will attract attention on Tuesday, is expecting to come at 100.2 compared to previous 100.3. A strong reading might boost the dollar, signaling robust consumer spending, while weak reading could dampen sentiment.
Wednesday – U.S FED Minutes
- Wednesday’s July inflation numbers in Australia could be important data. If the data reveals that headline inflation has dropped back into the Reserve Bank of Australia’s (RBA) 2-3% target band for the first time in three years, it would be a significant development. The CPI is expected to come at 3.4% down from previous 3.8%. This could weight on the dollar.
- FOMC Member Waller Speaks will be another event to keenly watch for the dollar.
Thursday – U.S. GDP, Unemployment Claims
- The second estimate of the U.S. GDP for Q2 will be analyzed to confirm the strength of the U.S. economy. A revision could have implications for the Fed’s policy outlook and, by extension, the USD. The reading is expected to higher 2.8% compared to the previous 2.8%. While, German Flash Manufacturing PMI is expected to 43.40 compared to 43.20.
- Meanwhile, German Prelim CPI m/m will take attention during the day. The data is expected to be flat compared to previous 0.3
- U.S. Unemployment is said to be the next release of the day. The data is expected to increase by 234k compared to the previous week 232k. This could have a negative effect on the value of the dollar.
Friday – U.S. PCE, Tokyo CPI, Eurozone CPI
- In the Asia-Pacific region, Japan’s unemployment rate and retail sales data will attract attention. These indicators will provide a glimpse into the health of the Japanese economy and could influence the Bank of Japan’s policy stance, particularly in the context of ongoing discussions around ultra-loose monetary policy. The number is foreseen at 2.2% unchanged from the previous.
- The preliminary Consumer Price Index (CPI) for the Eurozone will be a critical focus. A higher or lower reading could influence the European Central Bank’s (ECB) upcoming interest rate decision, as the ECB continues to navigate between controlling inflation and supporting economic growth. Data is foreseen at 2.2% lower from previous 2.6%, that could weight on the Euro.
- The U.S. PCE price index is a vital inflation measure closely watched by the Federal Reserve. Any significant changes could sway the Fed’s stance on future rate hikes, impacting the USD. The data is foreseen at 0.2% from previous 0.2%. The data could have a neutral impact on the dollar, if it matches with market expectation.
Happy Trading!
Commodity Samachar
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