Market movers today
Main event will be the FOMC statement tonight (no press conference or new projections at this meeting). We expect a slightly more positive tone on the labour market in line with Fed chairman Janet Yellen's recent comments at her semi-annual testimony to Congress. FOMC may also make the inflation language a bit less dovish as inflation has turned higher over the past three to four months - see FOMC preview , 29 July.
Before the Fed meeting a number of interesting releases are due. At 14:30 CET US GDP data for Q2 are expected to show growth of around 3% in Q2 following the big decline in Q1. It will leave the first half at a very low level. However, forward-looking indicators point to growth in H2 of 3-3.5% and job growth has picked up, so the Fed is likely to feel confident about the outlook. The US also releases ADP employment this afternoon expected to show a job gain of 225k in July.
In Europe focus will be on preliminary CPI data out of Spain and Germany, Spanish GDP for Q2 and the EU confidence indicators for July. Spanish CPI is expected to decline into negative territory to -0.2% y/y, while German inflation is projected to drop to 0.7% y/y from 1.0% y/y in June. We expect tomorrow's euro flash CPI to print a new cycle low at 0.4% y/y in July from 0.5% in the previous two months.
In Sweden we expect Q2 GDP to have improved to 1.0% q/q.
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