A Week in the Market: ECB Takes Centre Stage (18.07–22.07)
The third week of July is going to be busy with news and events – rate decisions by the European Central Bank and the Bank of Japan, as well as employment and inflation data from the UK and Canada, respectively.
USD: real estate market
Market expectations of a 100-point rate hike by the US Fed provided the American currency with much support. However, real estate data might drop, thus weakening the bears, who aren’t too impressive already. Reports on Building Permits and Existing Home Sales are scheduled to be released on Tuesday and Wednesday.
The United Kingdom: a lot of news
It will start on Tuesday with data on employment (Claimant Count Change and Unemployment Rate). The next day, the country will release many numbers on prices (PPI Input, PPI Output, CPI, Core CPI, RPI, and HPI). Friday will offer readings on Retail Sales and Manufacturing/Services PMIs. At the moment, the Pound is correcting and strong numbers might help it go higher.
AUD: hints at a rate hike
On Tuesday, market players will keep a close eye on the Monetary Policy Meeting Minutes of the Reserve Bank of Australia and look for any hints at further monetary policy tightening, a 50-point rate. If it happens, the AUD might get significant support.
Central Banks meetings
On Thursday, the ECB and the BoJ are expected to announce their rate decisions. Investors barely have any doubts that the European regulator will raise the benchmark interest rate by 25 basis points, the first time since 2011. However, they are looking forward to the press conference where the ECB is expected to announce the next rate hike as early as September. The Bank of Japan, on the contrary, is not anticipated to spring any surprises, but the volatility in JPY pairs might rise.
Inflation in Canada
The data on Retail Sales and Core Retail Sales will be released on Friday. Inflation might continue rising and it will be a significant disadvantage for the CAD – despite the decision of the Bank of Canada to raise the rate, the national currency plunged after this news. Investors are really worried that this decision by the Canadian regulator might increase the risks of a recession.