German trade sentiment
German trade sentiment, European Central Bank chief Lagarde, and UK inflation numbers are in focus ahead of the FOMC meeting.
European economic calendar
It’s a fairly busy day for the euro, with the German economy back in the spotlight with the German Ifo business sentiment index in focus.
According to Germany’s preliminary composite PMI for May, business expectations weakened in May, weighed down by declining confidence in the manufacturing sector. Weaker Ifo business sentiment index and components weigh on EUR.
Economists expected the business climate index to fall to 93.0 from 93.6.
Regarding the German economy, investors should keep an eye on the comments of the European Central Bank. European Central Bank President Christine Lagarde will speak on the calendar today. The European Central Bank has remained steadfast in bringing inflation to the target. However, cracks are starting to appear in the Eurozone economy, which could give sellers more momentum.
UK economic calendar
It’s a busy day for the pound. The all-important UK CPI report will be in focus this morning. After disappointing private sector PMI numbers from Tuesday, sticky inflation could force the Bank of England into an aggressive monetary policy move to rein in inflation.
Economists forecast the UK’s annual inflation rate to fall to 8.3% from 10.1% and headline inflation to fall to 7.3% from 8.5%. Hotter-than-expected inflation numbers could fuel an interest rate hike in June, forcing markets to consider more hawkish monetary policy and the increased threat of a recession from the Bank of England.
Given the inflation in the UK, investors should also monitor BoE members’ comments. Bank of England Governor Andrew Bailey is on the calendar today. Bailey will deliver a keynote address at the Mansion House Net Zero Delivery Summit before speaking at the Wall Street Journal’s Inflation and the Economy CEO Council.
US Economic Calendar
Looking ahead to the US meeting, it’s a quiet day on the US economic calendar. There are no US economic indicators for investors.
However, the FOMC’s minutes at the end of the US meeting will also be of interest due to news on the US debt ceiling and US Treasury Secretary Janet Yellen.
According to the CME FedWatch Tool, the probability of a 25 percent increase in interest rates by the Federal Reserve rose to 28.1 percent in June, up from 25.7 percent on Monday. Better-than-expected US private sector PMI numbers and progress toward a debt ceiling deal could significantly increase the chances of a rate hike in June.
|466.435||High||USD||Core PCE Price Index (MoM) (Apr)||26/05/2023 12:30 PM||0.3%||0.3%||0.4%|
|466.434||High||USD||Core Durable Goods Orders (MoM) (Apr)||26/05/2023 12:30 PM||0.2%||-0.2%|
|466.430||High||GBP||Retail Sales (MoM) (Apr)||26/05/2023 06:00 AM||-0.9%||0.4%||0.5%|
|466.427||High||AUD||Retail Sales (MoM) (Apr)||26/05/2023 01:30 AM||0.4%||0.0%|
|466.413||High||USD||Pending Home Sales (MoM) (Apr)||25/05/2023 02:00 PM||-5.2%||0.5%||0.0%|
|466.409||High||USD||Initial Jobless Claims||25/05/2023 12:30 PM||242K||250K||229K|
|466.406||High||USD||GDP (QoQ) (Q1)||25/05/2023 12:30 PM||2.6%||1.1%||1.3%|
|466.396||High||EUR||German GDP (QoQ) (Q1)||25/05/2023 06:00 AM||-0.4%||-0.1%||-0.3%|
|466.392||High||USD||FOMC Meeting Minutes||24/05/2023 06:00 PM|
|471.681||High||EUR||ECB President Lagarde Speaks||24/05/2023 05:45 PM|