The Olympics are over, hopefully extreme Summer volatility is over and now we can get back to the data. This week the focus reverts to data events in both US and UK. To summarise last week the S&P closed at roughly the same level that it opened, 5350, whilst the Cboe Volatility Index - Wall Street’s fear gauge - has reversed off its highest level since the early days of the Covid-19 pandemic. So what data do we have in store for the week ahead. In the US we have July CPI data on Wednesday, it is expected to show that that inflation continued to edge closer to the Fed’s 2% annual target. We get to hear from several Fed officials including Atlanta Fed President Raphael Bostic, Philadelphia Fed President Patrick Harker and Chicago Fed President Austan Goolsbee, will they state that inflation is cool enough to cut rates by 50%? The retail sales numbers and initial claims data are released on Thursday, will these numbers help their arguments? The conundrum is simple, has the Fed sent the economy into a tailspin by leaving rates elevated for too long or have they played their hand perfectly....Away from the US the UK releases a string of data, wage growth on Tuesday, inflation Wednesday, monthly GDP data on Thursday and retail sales data on Friday. The Bank of England cut rates for the first time since 2020 earlier this month and markets are currently pricing in a roughly 33% chance of another quarter point cut at its September meeting, as the last meeting was 5-4 I struggle to see another September cut.
Back to today and overnight West Texas Intermediate crude rose 0.3% to $77.04 a barrel, Spot gold fell 0.2% to $2,427.25 an ounce, Bitcoin was little changed at $58,527.48 and Ether fell 0.6% to $2,541.2. Cable opens at 1.2775, EURUSD at 1.0920 and USDJPY at 147.30. It is supposed to be 33 degrees Celsius in London today, so there may be a little more attention on the weather than the markets.
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