Week Ahead – Dollar Turns To US Inflation Data
XM Group | Aug 06, 2021 07:55AM ET
US inflation set to cool
Fed officials have started to beat the tapering drums. This past week, another two senior policymakers threw their weight behind dialing back stimulus soon. One of them was Vice Chairman Clarida, the Fed’s second in command.
The other was Board Governor Waller, who went as far as saying that if the next couple of employment reports are strong, the Fed should get the ball rolling in September already. Both are permanent voters in the FOMC, so their views carry weight.
For the pound, the risk is what happens to unemployment now that the government’s job-protecting programs are being rolled back. The furlough scheme has been cut back and will end completely in late September. On the bright side, the BoE doesn’t foresee a spike in unemployment because of this.
Chinese and German data coming up
Over in China, trade data for July will be released over the weekend, ahead of inflation numbers early on Monday. Markets usually pay more attention to producer prices, which are seen as a proxy for global factory demand.
In Germany, the ZEW survey for August is due out on Tuesday. This is typically not a market mover for the euro, but it will be interesting to see how strategists see the Eurozone’s largest economy performing in August.
Finally, the earnings season will begin to wind down with household names like Walt Disney (NYSE:DIS), eBay (NASDAQ:EBAY), Electronic Arts (NASDAQ:EA), and Airbnb releasing their quarterly results.
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