Euro May Overlook German CPI as Markets Brace for Busy Week Ahead


TALKING POINTS – EURO, CPI, ECB, BOE, BOJ, FED

  • Euro unlikely to find follow-through after German CPI data
  • Major currencies mark time as markets brace for busy week
  • Policy decisions from the Fed, BOJ and BOE in focus ahead

German CPI data headlines the economic calendar in European trading hours. The headline on-year inflation rate is expected to register at 2.1 percent in July, unchanged from the prior month. Regional price growth data has deteriorated relative to forecasts in recent months, opening the door for a downside surprise.

The Euro may not find lasting follow-through on such an outcome however considering its limited implications for near-term ECB policy. QE asset purchases appear to be on autopilot through year-end and President Draghi seemingly endorsed market pricing showing no rate hikes at least until October 2019.

Most major currencies marked time in Asia Pacific trade, with market participants seemingly shying away from directional conviction ahead of a week packed with high-profile event risk. Rate decisions from the BOJ, the Fed and the Bank of England are just some of the key fundamental flashpoints on offer.

Japan’s monetary authority might lay the foundation for a policy change, the Fed is widely expected to keep rates on hold but its statement may dial up hawkish rhetoric, and the BOE will likely raise its target lending rate as well as update guidance on how much tightening to expect thereafter.

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ASIA PACIFIC TRADING SESSION

EUROPEAN TRADING SESSION

European Trading Session Economic Calendar

** All times listed in GMT. See the full economic calendar here.

FX TRADING RESOURCES

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter





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