Risk-off moods dominate on the global financial markets as further acceleration in US inflation threatens even quicker Fed tightening. While we have to wait until July 27th for the FOMC decision, the ECB and BoJ will announce theirs next week. Apart from that, traders will also tune in for flash PMIs from Europe. Last but not least, Wall Street earnings season for Q2 2022 is gathering pace. Be sure to watch DE30, EURJPY and US100 next week.
DE30
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Create account Try a demo Download mobile app Download mobile appTraders will get a fresh update on the moods within major European economies on Friday, with the release of flash PMI indices for July. Market expects a deterioration in manufacturing and services sectors in July but readings from neither major European economy are forecast to show contraction levels (<50). However, should we see a drop below 50, European indices may find themselves under pressure. Reports from France (8:15 am BST) and Germany (8:30 am BST) will be the most closely watched ones.
EURJPY
Next week will see the announcement of rate decisions from 2 major central banks - ECB (Thursday) and Bank of Japan (Friday). The Bank of Japan is unlikely to make a move but will likely have to address recent JPY weakness. On the other hand, ECB is expected to deliver the first rate hike in years. However, in this case questions on exchange rate will also need to be answered, given that EUR dropped to parity levels with USD. Policy divergence between ECB and Fed is likely to be one of key topics during Christine Lagarde's press conference.
US100
First week of Wall Street earnings season for Q2 2022 is behind us. Major US banks disappointed with weaker profits and sales, as well as increased provisions for bad loans. A new week will see a more diverse earnings stream, with tech companies. Among top reports this week one can find IBM (Monday), Netflix (Tuesday) or Tesla (Wednesday). However, will it be enough to turn fortunes for a battered Nasdaq-100 index?
