The week ahead ( 10 – 14 Jul ) : Eyes will be on Yellen testifies

9 Jul 2017 10:24 PM

The markets are looking for a few data and economic events this week but they are very important, after a week of US labor market data, and the markets will not look far away, as they will focus on what coming out from Janet Yellen about FED monetary policy. Here are the highlights of the markets:

British labor market data
Unemployment claims for June are expected to rise by 10.4K on Wednesday, after rising by 7.3K in May. Average earnings data will also be released for the three months from March to May and is expected to continue slowing to 1.8%, following the previous 2.1% reading.
Markets are currently looking for the BOE to raise interest rates as inflation figures continue to rise, despite uncertainty over the Brexit negotiations.

Canadian Interest Rate Decision
All expectations are going this time that the BOC to raise interest rates by 25 basis points to 0.75%. Speculation has recently risen on the bank's move as the economy has begun to adjust to low oil prices, the labor market has recently improved, and then Stephen Poloz, governor of the BOC, said that low interest rates had done their job. The interest rate statement is expected to be released in addition to the monetary policy report, followed by the Bank of Canada press conference.

US inflation data
The US CPI is due for release for June. The index is expected to rise by 0.1%, while the core index that excluding food and energy prices may rise by 0.2% monthly and by 1.7% year-on-year. The rise in inflation figures is an additional incentive for the FED to continue tightening its monetary policy.
Also, US retail sales data will be released for June, and are expected to rise by 0.1%, while core retail sales which excluding car sales may rise by 0.2%. Retail sales are realted to strong economic growth, with consumer spending accounting for about 70% of US economic growth.


Yellen testifies
Janet Yellen, FED Governor, will give her semi-annual testimony to the Senate on Wednesday and Thursday. Markets will monitor her comments to come up with any new trends in the Fed that are expected to confirm the continued growth of the US economy. The path of tightening monetary policy gradually, and will highlight the issue of reducing the balance of the US Federal.

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