Global market watchers will be following a
number of important events and economic data this week as the European Central Bank
will set interest rates, while high-relevance economic data will be released
from the United States.
Euro traders to focus on ECB meeting
The euro will be affected by the comments of
the European Central Bank, where monetary policy makers will meet this week to
set interest rates.
The central bank is expected to keep interest
rates, but the ECB may announce new stimulus plans to support economic growth
and inflation in the euro zone.
Financial markets will wait for the latest
economic developments in the Eurozone, amidst the global economic slowdown and trade
war, as well as the uncertainties regarding Britain's exit from the EU.
On the economic data front, investors will
focus on the eurozone manufacturing and services Purchasing Managers’ Index (PMI),
which may show a slight drop in growth in July to 51.9 from 52.2 in June.
US dollar will receive signals from data
The US dollar will remain under scrutiny as
investors will follow the latest economic data from the US as they may
significantly determine the course of monetary policy of the Federal Reserve.
One of the most important reports this week is
the preliminary GDP reading for the second quarter, which may show a decline in
growth to 1.9% year-on-year, compared to the first quarter's 3.1% growth.
Another very important report is the durable goods
orders, which may signal a 0.5% rise in June after falling by 1.3% in May.
Also, the initial Manufacturing and Service PMI
for July may receive some attention, as the report will reflect the state of
economic activity at the beginning of the third quarter.
Last but not least, US officials may travel to
Beijing this week for personal negotiations with their Chinese counterparts.
Pound to follow general market trend
As usual, the attempts by the British pound to
rebound from a two-year low against the dollar last week failed, as the
negative impact of the Brexit continued alongside the ongoing political
conflict.
The British Pound's movements this week may
depend on the latest developments in the Brexit, as there is no economic data
of great importance from Britain. Therefore, the pound is likely to move according
to the general trend in the markets and the latest political developments in
Britain.
Commodities look for exiting volatility
Last week, gold traded above $1400 an ounce as
the prices benefited from trade tensions between the United States and China
and expectations of a Fed rate cut by the end of July.
It is reasonable to claim that gold prices this
week will depend on US data and recent developments in US-China trade talks.
Regarding oil prices, there has been some
decline in the past week, despite data from the US government showing a
larger-than-expected drop in crude stocks last week, since investors instead
focused on large building of refined product stocks.
Oil price movements will depend on optimism or pessimism in the markets
in the event of any developments in the US-China trade negotiations, as well as
the US government's weekly report tracking the change in of US crude stockpiles.
