Summary:
- Ifo index, Draghi speech main points on Monday
- The FOMC to deliver a rate hike on Wednesday
- Oil remains elevated, watch the inventory data
Monday’s calendar:
9:00am BST Ifo index in Germany (consensus sees a decline from 103.8 to 103.2 pts.)
11:00am BST CBI orders in UK (consensus sees a decline from 7 to 5 points)
2:00pm BST Draghi (ECB) speech
3:30pm BST Dallas Fed indicator
Later this week:
FOMC decision (Wednesday, 7:00 pm BST - decision, 7:30 pm BST - press conference)
Federal Reserve is expected to raise interest rates during September meeting by another 25 bp. As this is almost certain investors’ attention will be dragged to the projections and the dot-chart released along with the decision. Market participants will analyze fresh set of forecasts to see whether the US central bankers recognized the latest deterioration in inflation dynamics and a pick-up in the wage growth data.As the trade conflict between the World’s biggest economies intensified recently the topic may be raised as well. Affected markets: US500, TNOTE, USDIDX.
Another false breakout for the dollar? USDIDX tries to recoup recent losses, the FOMC meeting will be crucial. Source: xStation5
CPI inflation from Europe (Friday, 10:00 am BST)
During the meeting in September ECB confirmed its plan to cease asset purchase programme by the year end. Moreover, President Mario Draghi said during the press conference that the uncertainties surrounding the inflation outlook start to recede. Draghi’s confidence concerning the price growth boosted euro significantly. Investors will now watch the inflation data carefully to see whether he was right and whether it will provide solid ground ahead of the impending, although slowly, monetary policy normalization process. Data from the member countries may offer a hint ahead of the EMU print with the German readings (Tuesday) having the biggest impact. Affected markets: EURUSD, DE30.
Oil inventories (Wednesday, 3:30 pm BST)
Oil traders cannot complain about the lack of emotions. On one hand, the market is concerned about a significant drop in the Iranian exports due to the US sanctions that pushes price higher. On the other, Donald Trump is always ready to step in with his comments about too high prices and in turn send valuation lower. Elsewhere, despite continuously improving production figures oil inventories marked the biggest percentage decline YTD since at least 2010. Whatever will happen stocks data should be watched closely as it rarely fails to impact prices. Affected markets: OIL, OIL.WTI.
