This week, investors will focus on inflation data in the United States and China. The US inflation is expected to continue to decline, increasing the likelihood of a first-rate cut from the Fed in September. But any surprise in the form of an increase will be considered by investors that the easing cycle will not come soon, which will support the US dollar. Also, the Reserve Bank of New Zealand (RBNZ) will meet to discuss interest rate decisions this week. Analysts expect New Zealand’s Central Bank to leave rates unchanged, but the RBNZ chief’s comments at the press conference may be softer than before, as the latest statistics point to the economy’s weakness. Federal Reserve Chairman Jerome Powell is scheduled to testify on Tuesday and Wednesday before the Senate and House of Representatives, respectively. Powell is likely to respond in the same vein as he did at last week’s economic forum in Portugal. Investors should also keep on the start of the US earning period for the second quarter of 2023. JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) will report second-quarter earnings on Friday.
Monday, July 08
No important events are expected on Monday, the day will be relatively calm in terms of volatility.
Main events of the day:
- German Trade Balance (m/m) at 09:00 (GMT+3).
Tuesday, July 09
On Tuesday, Fed Chairman Powell will testify on the economic outlook and the latest monetary policy measures before the Senate Banking Committee. Powell is likely to repeat comments made at last week’s economic forum that he wants to be more confident that inflation will return to the 2% target before he begins easing policy.
Main events of the day:
- Australia NAB Business Confidence (m/m) at 04:30 (GMT+3);
- US Fed Chair Powell Testifies at 17:00 (GMT+3);
- US FOMC Member Bowman Speaks at 20:30 (GMT+3).
Wednesday, July 10
Wednesday will bring various statistics for many countries. On Wednesday, traders will focus on the Reserve Bank of New Zealand’s monetary policy meeting. Policymakers are expected to leave the rate at the same level of 5.5% but may adopt a more dovish verbal rhetoric a week earlier amid weakness in the economy. Also on Wednesday, China’s inflation data will be released, which has a broad impact on the Asian indices. Falling inflation may have a positive impact on the Asian indices as it will increase the likelihood of economic stimulus from the Chinese authorities.
Main events of the day:
- Japan Producer Price Index (m/m) at 02:50 (GMT+3);
- China Consumer Price Index (m/m) at 04:30 (GMT+3);
- China Producer Price Index (m/m) at 04:30 (GMT+3);
- New Zealand RBNZ Interest Rate Decision at 05:00 (GMT+3);
- New Zealand RBNZ Rate Statement at 05:00 (GMT+3);
- US Fed Chair Powell Testifies at 17:00 (GMT+3);
- US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
- US FOMC Member Bowman Speaks at 21:30 (GMT+3).
Thursday, July 11
The most important Thursday release for investors will be the US Consumer Price Index, which displays the level of inflation. Consumer prices are expected to decline from 3.3% y/y to 3.1% y/y. This may increase the probability of a rate cut in September by the US Fed, which is negative for the USD. Thursday, we will also see the release of UK GDP data for May, as well as industrial and manufacturing production figures for the month. With the Labor Party gaining a majority in Parliament, the Bank of England may accelerate its easing process on expectations of a more fiscally responsible government, which could be negative for the pound in the medium term.
Main events of the day:
- UK GDP (m/m) at 09:00 (GMT+3);
- UK Industrial Production (m/m) at 09:00 (GMT+3);
- UK Manufacturing Production (m/m) at 09:00 (GMT+3);
- UK Trade Balance (m/m) at 09:00 (GMT+3);
- US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
- US Consumer Price Index (m/m) at 15:30 (GMT+3);
- US Natural Gas Storage (w/w) at 17:30 (GMT+3);
- US FOMC Member Bostic Speaks at 18:30 (GMT+3).
Friday, July 12
Friday’s main release will be the US Producer Price Index data. This data shows the level of inflation between factories and is a leading indicator of consumer inflation. No major changes are expected, but volatility in the US dollar pairs will increase.
Main events of the day:
- China Trade Balance (m/m) at 06:00 (GMT+3);
- US Producer Price Index (m/m) at 15:30 (GMT+3);
- US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).
- Eurozone Trade Balance (m/m) at 12:00 (GMT+3);
- Australia RBA Governor Lowe Speaks at 6:10 );
- UK BoE Financial Stability Report at 09:00 (GMT+3);
- UK BoE Gov Bailey Speaks at 11:00 (GMT+3);
- US Consumer Price Index (m/m) at 15:30 (GMT+3);
- US FOMC Member Kashkari Speaks at 16:45 (GMT+3);
- Canada BoC Interest Rate Decision at 17:00 (GMT+3);
- Canada BoC Monetary Policy Report at 17:00 (GMT+3);
- Canada BoC Press Conference at 18:00 (GMT+3);
- US FOMC Member Mester Speaks at 23:00 (GMT+3);
- UK Average Earnings Index (m/m) at 09:00 (GMT+3);
- UK Claimant Count Change (m/m) at 09:00 (GMT+3);
- UK Unemployment Rate (m/m) at 09:00 (GMT+3);
- German Consumer Price Index (m/m) at 09:00 (GMT+3);
- German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
- Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
- US FOMC Member Bullard Speaks at 16:00 (GMT+3);
- US FOMC Member Daly Speaks at 18:30 (GMT+3);
- US FOMC Member Mester Speaks at 18:00 (GMT+3);
- US FOMC Member Bostic Speaks at 19:00 (GMT+3);
- UK BoE Gov Bailey Speaks at 22:00 (GMT+3);
- Eurozone Industrial Production (m/m) at 12:00 (GMT+3);
- Eurozone Eurogroup Meetings at 13:00 (GMT+3);
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
