Week’s main events (July 22 – July 26)

The main focus of investors this week will be on the meeting of the central banks of Canada, as well as the US PCE inflation report. There is a 90% probability that the Bank of Canada will cut interest rates for the second time this cycle. Regarding the inflation report, economists expect June’s Personal Consumption Expenditures (PCE) Price Index to rise 0.1% for the second consecutive month, pushing three-month annualized core inflation down to its lowest pace this year. Also worth watching this week are the US Q2 GDP data and the manufacturing and service sector PMI data, which will show the health of key economies at a time of high interest rates.

Monday, July 22

No important news is expected in the European and American sessions on Monday. The main attention of traders will be focused on the interest rate data of the People’s Bank of China (PBoC). After the one-year medium-term funding rate was left unchanged at 2.50%, there seems to be little incentive for banks to lower lending rates. However, Asian indices may be volatile.

Main events of the day:

– New Zealand Trade Balance (q/q) at 01:45 (GMT+3);
– China PBoC Loan Prime Rate at 04:15 (GMT+3).;

Tuesday, July 23

On Tuesday, traders will be focused on Singapore’s inflation data. According to global macro models, inflation in Singapore will be 2.90%, down from the current 3.1%

Main events of the day:

– Singapore Consumer Price Index (q/q) at 08:00 (GMT+3);
– US Existing Home Sales (m/m) at 17:00 (GMT+3).

Wednesday, July 24

Wednesday will be full of economic events. The main event will be the Bank of Canada monetary policy meeting. The swap market estimates the probability of a rate cut at over 90%. The probability rose sharply on the back of the disappointing retail sales report for May at the end of last week (-0.8% vs. 0.6% growth in April). A rate cut would be the second for the Bank of Canada. Wednesday will also see the release of a slew of data on business activity in the manufacturing and service sectors. These data help assess economic health. Values above 50 indicate industry growth, while values below 50 indicate contraction. And let’s not forget about oil prices. In recent weeks, there has been a significant increase in oil reserves, which puts pressure on black gold.

Main events of the day:

– Australia Manufacturing PMI (m/m) at 02:00 (GMT+3);
– Australia Services PMI (m/m) at 02:00 (GMT+3);
– Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
– Japan Services PMI (m/m) at 03:30 (GMT+3);
– Germany Manufacturing PMI (m/m) at 10:30 (GMT+3);
– Germany Services PMI (m/m) at 10:30 (GMT+3);
– Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
– Eurozone Services PMI (m/m) at 11:00 (GMT+3);
– UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
– UK Services PMI (m/m) at 11:30 (GMT+3);
– US Manufacturing PMI (m/m) at 16:45 (GMT+3);
– US Services PMI (m/m) at 16:45 (GMT+3);
– Canada BoC Interest Rate Decision at 17:00 (GMT+3);
– Canada BoC Monetary Policy Statement at 17:00 (GMT+3);
– US New Home Sales (m/m) at 17:00 (GMT+3);
– US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
– Canada BoC Press Conference at 17:30 (GMT+3);
– FOMC Member Bowman Speaks at 23:05 (GMT+3).

Thursday, July 25

On Thursday, traders should pay attention to the US GDP data for the quarter. Growth of 2.5% QoQ is expected, up from the previous 1.4% QoQ. As a rule, GDP growth is accompanied by dollar appreciation, which is negative for gold and indices.

Main events of the day:

– German Ifo Business Climate (m/m) at 11:00 (GMT+3);
– US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
– US GDP (q/q) at 15:30 (GMT+3);
– US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
– US Natural Gas Storage (w/w) at 17:30 (GMT+3);
– Eurozone ECB President Lagarde Speaks at 18:00 (GMT+3).

Friday, July 26

There’s not much news on Friday, but it’s worth investors attention. In the Asian session, it is worth paying attention to the Tokyo inflation data, which is considered to be ahead of the national inflation rate. It is expected to rise from 2.1% to 2.3% y/y, which will be in favor of the Bank of Japan (BoJ at next week’s meeting. In the US session, traders will be watching the US PCE inflation data. This is the US Federal Reserve’s preferred measure of inflation. The PCE deflator may turn out to be a bit tougher than CPI. The core PCE may rise by about 0.3% month-on-month to 2.5% year-on-year (2.6% in May). This may give temporary support to the US dollar.

Main events of the day:

– Japan Tokyo Core CPI (m/m) at 02:30 (GMT+3);
– US PCE Price index (m/m) at 15:30 (GMT+3);
– US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

by JustMarkets, 2024.07.22

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