FOMC member Brainer caused markets stumble yesterday as we saw her dovish comments dampen the hawkish sentiment which has driven the USD higher in recent trade. She stated that there was not yet enough cause to raise rates, implying that a wait and see stance should be taken. The USD gave back several pips across the board while gold went bid off its session lows and equities reclaimed some of their recent losses. With a week left till the actual rate announcement, and markets on edge, we expect any and all significant data and comments out of the US to have an impact on markets, with markets on lookout for data confirming or dismissing a rate hike. All bearish data will see the USD sold while gold and equities rise and conversely all bullish data will see the USD rise while gold and equities drop.
Also, looming large today is the UK data which will have a severe impact on the GBP depending on the figure released. With over 3 month lapsing since the Brexit vote and a month after the BOE took action to stimulate the British economy, todays data will show just how resilient the UK economy is with positive CPI data, likely to see the GBP reaching for the stars while worse than expected data has it grabbing for support as it tumbles.
Also, one to watch is ECB President Draghi’s speech which just days after his official release last week, will be scrutinized by traders as they look for any clues to the future outlook for the ECB`s monetary policy.
Today’s key economic data is as follows:
- PPI m/m expected at -0.2%
- CPI y/y expected at 0.7%
- PPI Input m/m expected at 0.6%
- RPI y/y expected at 1.8%
- ECB President Draghi Speaks
- German ZEW Economic Sentiment expected at 2.8
- ZEW economic Sentiment expected at 6.7
- Current Account expected at -0.3B