Yesterday, the biggest news in the financial markets was the Jerome Powell testimony. In the statement, the chair said that the officials will likely lower interest rates in the coming meeting. This was in line with the previous expectations. Investors are now pricing-in two more rate cuts this year. Today, attention will still remain on the Fed chair, who will be continuing his testimony to the senate. Here are the biggest stories to look out for today.
In Germany, the country’s statistics office released the CPI data. The headline CPI remained unchanged at 1.6% in June. This was in line with the expectations. On a MoM basis, the CPI remained unchanged at 0.3%. The harmonized index of consumer prices increased by 1.5%, which was higher than the previous 1.3%. On a MoM basis, the HICP increased by 0.3%, which was higher than the previous 0.1%. Meanwhile, in France, the CPI increased by a MoM rate of 0.3%, which was higher than the expected 0.2%. The HICP increased by 1.4%, which was in line with the expectations. On a MoM basis, the HICP remained unchanged at 0.3%.
Sweden will release the inflation numbers. The data is expected to show that the headline CPI declined to 1.9% in June from the previous 2.2%. On a MoM basis, the CPI is expected to have declined by -0.1% from the previous gain of 0.3%. At constant interest rates, the headline CPI is expected to have declined to 1.8% from the previous 2.1%. On a MoM basis, the CPI is expected to have declined by -0.1%.
UK Financial Stability Report
Today, the Bank of England will release the Financial Stability Report (FSR). This is an important document that sets out the financial policy committee’s view on the stability of the UK financial system. It also explains the actions the bank is taking to remove or reduce any risks. This comes a few weeks after the BOE met and released its interest rates decision. The bank committed to leave interest rates unchanged and raise interest rates if there is a smooth Brexit.
United States will release the CPI data today. Investors expect the CPI to have declined by 1.6% in June after increasing by 1.8% in May. On a MoM basis, the investors expect the CPI to remain unchanged. The closely-watched core CPI is expected to remain unchanged at 2.0%. On a MoM basis, the core CPI is expected to have increased by 0.2%. The initial jobless claims is expected to decline to 220k from the previous 221k. The continuing jobless claims are expected to have declined to 1,685k from the previous 1,686k.
The Department of Agriculture will release the World Agricultural Supply and Demand Estimates (WASDE). This is a monthly report, which the agency provides details about the expected supply and demand for major agricultural commodities. As a result, these commodities will likely to see major movements today.