- EMU inflation is pivotal data before the ECB’s meeting
- CAD could be at stake as GDP data to come
- Chicago PMI will be the sole soft indicator ahead of NFP
The EURUSD marked a noticeable decline yesterday even as German inflation beat the consensus in terms of a harmonized index (being taken into calculations to EMU inflation). Moreover, ADP and GDP figures turned out to be much better than expected which buoyed the greenback. Today’s the data-wise abounds in a few noteworthy releases.
10:00 am BST - EMU inflation (HICP) and jobs data: Taking into account that the ECB’s meeting is getting closer, there is no doubt that inflation remains a key figure to watch. The data of HICP from Germany and Spain proved to be above forecasts hence there is a likelihood to get a pick-up for the whole Euro zone as well. The consensus assumes an increase to 1.4% yoy in August from 1.3% yoy seen last month. Even though HICP meets or beats the estimation, the EURUSD could struggle to get higher levels in the nearest future. What’s more, a likelihood of a downward revision of inflation forecasts by the ECB in September (mainly on the back of the much higher euro ex-change rate) could overshadow a backdrop of a bit higher inflation pressure across the Euro zone. When it comes to the jobless rate, it’s forecast to come in at 9.1% - in line with the prior release.
1:30 pm BST - Canadian GDP: Even as Canadian GDP is released each month it doesn’t mean that an effect on the currency is less visible. As far as a second rate increase is concerned, traders will get another package of data to digest hence the Canadian dollar could be more exposed. Let us remind that the next BoC’s meeting will take place in September 6 (next week), thus market participants would want to scrutinize the data. On top of that, oil prices could be a favorable factor for the CAD if refineries get back to normal work. The consensuses suggest 0.1% mom in July and 3.7% in Q2 (quarterly GDP annualized).
1:30 pm BST - US PCE, personal income and expenditures, 2:45 pm BST - Chicago PMI: The greenback has gotten back some of its mojo of late, however a continuation of a torrent of better data is needed to get the USD yet higher. In this respect, today’s data on PCE could be a game-changer in terms of low odds of a December’s rate increase in the US. Moreover, there will be a reading of Chicago PMI (a good predictor of manufacturing ISM) which is poised to be the sole soft indicator ahead of the tomorrow’s NFP, notice a first Friday of the new month coincides with a first day in the month, hence there will be neither manufacturing nor services ISM this week. Chicago PMI is forecast to show 58.5 in August whereas personal income should come in at 0.3% mom and personal spending is expected to rise from 0.1% mom to 0.4% mom.
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