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July 12 – Economic Events Outlook – U.S. Inflation Ready to Rumble

Who’s up for trading the market-moving economic events? Today, investors’ focus stays on U.S. inflation, ECB Monetary Policy Meeting Accounts and BOE Credit Conditions Survey. It’s going to be another highly volatile day, so let’s plan everything…

Watchlist – Top Economic Events

On Wednesday, the Greenback rose as data showing U.S. wholesale prices grew at a faster pace than last month’s forecast. Ultimately, hiking the investor expectations for stronger inflation, and increasing the prospect of further Fed rate hikes.

Great Britain Pound – GBP

BOE Credit Conditions Survey – The Bank of England report includes detailed data on secured and unsecured lending to households, small businesses, non-financial corporations, and non-bank financial firms.

How it impacts the market?

Well, it’s correlated with spending and confidence. For instance, the rising debt levels are an indication that lenders feel satisfied issuing loans, and that consumers and businesses are confident in their financial position and longing to spend money. To put it simply, we don’t spend a lot during uncertainty. The report is coming out at 8:30 (GMT) but may have a mild impact on the Sterling today.

Eurozone – EUR

ECB Monetary Policy Meeting Accounts – Recalling the ECB’s June meeting, Mario Draghi laid out its plan to diminish the asset purchase program to €15 billion in Q4 2018 and ending the quantitative easing altogether from 2019. Undoubtedly, it was a big announcement from the European Central Bank and today’s policy accounts may reveal more clues about the next policy.
In addition, the ECB promised to leave minimum bid rates at current levels through the summer of 2019. As per Draghi, future changes in the policy will heavily depend upon the economic conditions.

US Dollar – USD

CPI m/m – The U.S. labor market has failed to surprise as the unemployment rate soared to 4% from 3.8%. Logically, the increasing unemployment rate should also change the spending patterns of people. There should be less number of people spending on unnecessary products by the end of the month. Which means, the demand curve will be lower than before.

Thus, a drop in the demand leads to a dip in prices and a reduction in prices is a drop in inflation. Back in June, the Core CPI rose by 0.2% and economists are expecting no changes in this figure.

Anyway, because of the reason we discussed above, we should be ready to capture fluctuations caused by sudden changes in figures. CPI is due at 12:30 (GMT) today.

Unemployment Claims are also releasing at 12:30 (GMT) and higher chances of being overshadowed by the U.S. CPI data.

Summing Up – It’s a fundamental day, and the best thing to do is to take a position after the release of news. You should also refer to FX Leaders Fundamentals Trading Strategy to score better positions on news releases. All the best for today!

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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