Morning Briefing: US CPI Data and WASDE Report to be in Focus

Source: Forex News

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.

German CPI

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 CPI

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.

US Data

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.

WASDE Report

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.

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