In the US, Fed speakers include Janet Yellen who will be speaking next week. A rather busy week from the US will see the GDP revisions for the second quarter alongside the core PCE price index data.
In the eurozone, preliminary inflation numbers from Germany, Spain, and France will culminate with the flash inflation estimates for the eurozone in September. An expected increase in inflation could potentially spark further bets on QE tapering from the ECB when it meets in October.
GDP numbers from the UK and Canada are also expected to be released this week. The UK’s GDP is expected to remain steady at 0.3% on the final revision. However, the ongoing Brexit talks remain in the backdrop as far as volatility is concerned.
Here is a brief recap of the main events that will shape the currency markets this week.
US final GDP and PCE Price index
The week ahead is lined up with various Fed speakers taking the stage. Among the speakers, the Fed Chair, Janet Yellen will also be speaking. Ms. Yellen is expected to address the NABE conference on Tuesday. With the markets currently re-pricing another Fed rate hike by December, investors will be closely tuning into what the Fed speakers will have to say this week.
US Annual GDP RatE: 2.2%, Q2 2017. Source: Tradingeconomics.com
The FOMC meeting held last week was seen as slightly hawkish with the Fed expected to go ahead with its balance sheet unwinding from October and also signaled that rates could rise one more time. This has led to the odds for a rate hike increasing significantly to over 50% last week, following the FOMC meeting and statement.
On the economic front, data this week includes the PCE price index which is the Fed’s preferred inflation gauge. The core PCE price index is expected to remain steady at 1.4% on a year over year basis. The rate remains below the Fed’s 2% target rate and has fallen from January’s increase to 1.9%.
The U.S. final second-quarter GDP is also expected to be released this week. Economic activity is expected to be confirmed at 3% for the quarter ending June.
