- It’s a busy week for US data and events, as markets look forward to employment data in the coming days and the latest FOMC policy meeting. Fed officials meet on Tuesday and Wednesday and are expected to hold rates unchanged at 5.25-5.5% despite calls for a cut from some analysts. If rates are held steady, rate setters are likely to continue with recent rhetoric that a rate cut will be appropriate “sometime soon”. The week is also dominated by labor market data, kicking off with the JOLTs job openings report on Tuesday. Initial Jobless Claims are out on Thursday ahead of Friday’s Non-farm Payroll report. The July print is expected to come in around 190k, down slightly on the previous 206k. The jobless rate, which has climbed for three straight months, is expected to come in unchanged at 4.1%.
- Euro area inflation and GDP data will be closely monitored this week, with GDP numbers for the second quarter expected to show that the region’s economy grew by 0.3%. Preliminary CPI figures for July will likely show that headline inflation stayed unchanged as ECB officials look for further signs of softening price pressures before it eases policy any further.
- Many analysts have this week’s Bank of England policy decision on a knife edge, when they meet on Thursday. Inflation has been moving in the right direction but remains more stubborn that MPC members would like. Currently odds of a cut sit at 45% so a cut of 25bp should not be discounted, but the vote will likely be very close.
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