The ECB meeting delivered a surprise 50 basis point rate hike and now markets will look for Fed's move. The US central bank will announce a rate decision on Wednesday evening with the market expecting a 75 bp rate move. Apart from the Fed, traders will also focus on GDP reports from Europe and the United States next week. Be sure to watch GOLD, DE30 and EURUSD.
GOLD
The ECB meeting was a big event of the week with the central bank delivering the first rate hike in more than a decade. Next week attention will shift to the Federal Reserve as the monetary policy decision is scheduled for Wednesday, 7:00 pm BST. Market expects the US central bank to deliver another 75 basis point rate hike. Unfortunately, neither the US GDP report nor PCE data will be released ahead of the FOMC decision to give Powell more to talk about during the press conference at 7:30 pm BST. Nevertheless, indications of more aggressive tightening may be beneficial for USD and negative for precious metals, like gold.
DE30
European assets, including DE30, may experience an elevated volatility on Friday morning as second quarter GDP data from major euro area economies will be released. Data from Germany at 9:00 am BST will be most closely watched but reports from France (6:30 am BST) or Italy (9:00 am BST) will also attract attention. Positive growth rate is expected in major European economies for the second quarter but in some cases, expected growth equals 0.1% QoQ, so an unexpected contraction remains a possibility.
EURUSD
While the FOMC decision is a key event of the week, it is not the only one that may move USD. Release of US GDP data for Q2 2022 on Thursday, 1:30 pm BST as well as PCE core inflation for June on Friday, 1:30 pm BST may impact US dollar. After an unexpected contraction in Q1 2022, an annualized growth of 0.8% is expected for Q2. If expectations are confirmed, the US economy would avoid a technical recession, marked by 2 straight quarters of contraction. A strong report could help USD and once again threaten parity levels on EURUSD.
