Brace for a busy week in the financial markets, featuring the Federal Reserve's anticipated interest rate hike and an influx of earnings reports from top tech companies. The Fed is predicted to increase the policy rate to 5.5%, a 22-year high, amidst a backdrop of slowing inflation and robust economic indicators.
Amid these significant events, here are three other crucial happenings this week that could impact your investments. Stay tuned!
🇪🇺 🇺🇸 S&P Global Composite PMI
Mark your calendars for the much-anticipated US and EU S&P Global Composite PMI data release on this date. Both European and American releases will be disseminated at 11:00 GMT+3 and 16:15 GMT+3, respectively. This release sets a key milestone for the week, offering the first significant data insight that may steer the trajectory for investors and traders alike.
The PMI data, a crucial barometer of the manufacturing and service sectors' health, wield the potential to impact the Euro and the Dollar and resonate across global financial landscapes. Market participants need to pay close attention as the repercussions of this data can ripple through currency pairs such as EUR/USD, USD/JPY, and even influence the direction of global equity markets.
🔥 🇺🇸 Fed Interest Rate Decision
Next, prepare for one of the week's most decisive announcements — the Federal Reserve's Rate Decision. This crucial event will occur on July 26th. According to a comprehensive poll featuring 106 economists, the consensus is unanimous in anticipation of a 25 basis points increase in the US Federal Reserve's benchmark overnight interest rate, bringing it to a range of 5.25%-5.50%.
This prospective hike in interest rates is being closely monitored, as most analysts suggest it might culminate the ongoing tightening cycle. Consequently, the implications of this decision are expected to be far-reaching, potentially driving significant shifts across global financial markets, including currencies, equities, and commodities.
🇪🇺 ECB Interest Rate Decision
Get ready for another big event right after the Fed decision — the ECB Rate Decision. The decision is set to happen at 15:15 GMT+3. In mid-June, the ECB raised its interest rates to the highest in 22 years. They've also hinted that they might do it again in July, making it their ninth increase.
Why are they doing this? Well, they expect inflation to stay above their 2% target until at least the end of 2025. This could cause big changes for the Euro and the EUR/USD currency pair. You'll want to watch this if you're an investor or a trader.
🇺🇸 GDP q/q
Also, circle July 27th on your calendars! At 15:30 GMT+3, the U.S. Bureau of Economic Analysis is set to give us a sneak peek at how the US economy fared in the last quarter. This is a big deal, especially since the numbers from the first quarter were surprisingly good.
Economists and policymakers are all eager to see if this positive trend continues in the second quarter. However, some experts predict that the pace might have slowed. They're guessing a 1.8% increase, slightly less than the 2% growth we saw in Q1.
🇺🇸 June’s Core Personal Consumption Expenditures (Core PCE)
Finally, prepare for another important event on Friday, July 28th, at 15:30 GMT+3. The US Bureau of Economic Analysis will publish the Core Personal Consumption Expenditures (Core PCE) report for June. This report shows how much money, on average, people spend in a month, but leaves out things with prices that can change a lot, like food and energy.
Why is this so important? Well, the people who decide on money policy at the Federal Reserve (or the Fed) use this report to understand how much prices are going up (which we call inflation). If the report shows people spent more than expected, the Fed might decide to be more aggressive (or hawkish) in their future plans.
In other words, if you're keeping an eye on what the Fed might do next, you'll pay attention to this report.
That's it for this week! 👋
