In the week ahead, investors will be focusing on a speech by Federal Reserve head Jerome Powell at the central bank’s annual conference in Jackson Hole for insights on the future path of interest rates.
The speech could shake up markets. U.S. economic data will be in the spotlight as fears over the prospect of a recession linger. Meanwhile, PMI data out of the Eurozone and the UK is expected to point to further slowdowns in business activity.
Investors will be eagerly awaiting Jay Powell’s speech in Jackson Hole, Wyoming on Friday for possible answers about how high U.S. interest rates may go and how long they will need to stay at elevated levels to bring inflation back under control.
The economic calendar for the coming week features July figures on personal income and spending, which includes the personal consumption expenditures price index, the Fed’s preferred measure of inflation.
Europeans returning from their summer breaks will find a more fragile economy that risks buckling under the threats of energy rationing, record inflation, and tighter monetary policy.
Market watchers will also be looking at Thursday’s minutes of the European Central Bank’s July meeting for any insight on how large of a rate hike to expect in September after officials raised rates by 0.5% last month and flagged another increase at their upcoming meeting without committing on the size.
The UK is to publish PMI data on Tuesday which will be closely watched after the Bank of England warned earlier this month of a 15-month recession starting from the end of this year.
Inflation in the UK hit 10.1% in July, the highest since February 1982, and some economists expect it will hit 15% in the first quarter of next year amid surging energy and food costs.
Data last week showed that wages are lagging far behind price growth and consumer confidence has fallen to a record low.
Have your trading charts ready!
This Week’s High Impact Events
The times below are GMT +3.
Monday 22nd August
No High Impact Events
Tuesday 23rd August
10.15 – Europe – French Flash Services & Flash Manufacturing PMI
Potential instruments to Trade: EUR Crosses.
10.30 – Europe – German Flash Services & Flash Manufacturing PMI
Potential instruments to Trade: EUR Crosses.
11.30 – UK – Flash Services & Flash Manufacturing PMI
Potential instruments to Trade: GBP Crosses.
16.45 – US – Flash Services & Flash Manufacturing PMI
Potential instruments to Trade: GBP Crosses.
17.00 – US – New Home Sales & Richmond Manufacturing Index
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