August 13, 2022

Markets await ECB, RBA meetings and US May CPI

LQDFXperts Features | Markets await ECB, RBA meetings and US May CPI

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Elon Musk’s “super bad feeling” will be tested this week as markets await central bank meetings unfolding in the Eurozone and Australia. 

Despite Tesla’s CEO’s gloomy outlook, last Friday’s data showed the American economy generated more jobs in May than expected.

At the same time, China’s re-opening is in full swing. Beijing is following Shanghai’s example and further relaxing COVID curbs.

Finally, UK PM Johnson will remain in Downing Street, for now, having scraped through Monday’s vote.

This week is full of important economic events poised to move financial markets, including Central bank meetings and US May CPI data. 

As for the central banks, investors may focus on the interest rate decision in Australia and the ECB Meeting. 

The Australian economy benefited from the low-interest-rate environment set by the RBA during the COVID-19 pandemic. But now that economy is growing again the central bank is raising the cash rate.

The European Central Bank’s meeting on Thursday will be critical as ECB faces its toughest inflation test since the common currency’s introduction. As a result, the bank may draw a line under its years of bond-buying stimulus and signal a first rate hike in July. 

The US May CPI report is due on Friday, and all eyes are on the core CPI inflation. Core CPI inflation excludes energy and food prices, a massive driver of the rising prices of goods and services in the United States.

Is the world’s biggest economy heading towards a hard or a soft landing? This Friday’s U.S. consumer price report could shape expectations for the Federal Reserve’s policy tightening pace.

China will also release services PMI and inflation data alongside trade numbers for May. 

Final Q1 GDP figures from the eurozone and Japan are also due the week ahead.

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