This week brought a hawkish surprise from central banks, with the Bank of England and Norges Bank making larger-than-expected interest rate hikes. Fed Chairman Powell also sounded hawkish during his semi-annual testimony in Congress. Inflation data from Europe and the United States will be in focus in the coming week, as will speeches by central bankers at the ECB in Sintra, Portugal. Finally, the Fed is expected to release the results of its annual bank stress tests. Be sure to watch the EURUSD, US500 and GOLD in the coming week!
EURUSD
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Create account Try a demo Download mobile app Download mobile appThe EURUSD exchange rate was hit hard at the end of this week following the publication of disappointing PMIs from the Old Continent, as well as hawkish remarks made by Fed Chairman Powell during his semi-annual Congressional testimony. The pair will remain under scrutiny next week, as investors will receive the preliminary CPI reading for June from Europe (German reading - Thursday, 2:00 pm), as well as the core PCE reading for May from the United States (Friday, 2:30 pm).
US500
U.S. bank stocks may attract more attention in the coming week, as the Federal Reserve is expected to release the results of its annual banking stress tests on Wednesday. This year's results will be watched more closely than usual, following the collapse of three US financial institutions earlier this year. Tougher scenarios are expected to be tested this year, and the Fed will also test market shock scenarios affecting the trading books of major banks. If these results turn out to be worrisome, U.S. stock indexes could come under pressure.
GOLD
Gold fell to a three-month low last week as hawkish central banks and a strengthening dollar put pressure on precious metal prices. Gold may remain volatile in the coming week, as the ECB will host a central banking forum in Sintra, Portugal from Monday to Wednesday, and many members of leading central banks - the ECB, Fed, BoJ or BoE - are scheduled to deliver speeches there. Also, inflation data from Europe and the United States could trigger movements in the gold market.
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