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30 Jul 2014
Key events for the day ahead - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank explained the forthcoming events that are key n the day ahead starting with the European open.
Key quotes:
“Today we still have German CPI to look to, expected 0.2% MoM and 0.8% YoY, down from 1.0% in June: that will likely increase disinflation/”low-flation”/deflation concerns in Europe. There are also various Eurozone confidence surveys, which are expected to be broadly stable in the month: any downside surprises would amplify the theme mentioned above”.
“In the US there are a slew of key data. First up, ADP employment (which was bang on NFP last time): expectations are 230K (the same as payrolls on Friday). We also get Q2 GDP, where consensus is 3.0% vs. -2.9% QoQ annualized in Q1 – that sounds like a good bounce, but given it is QoQ it should arguably be stronger to suggest a healthy rebound. There may even be downside risks to this report based on the sluggishness seen in core durable goods orders in the quarter”.
“However, it’s all about the Fed today. There seems no chance of any surprise, with the recent run of data supporting a further USD10bn tapering step, taking QE down to “just” USD25bn per month. Therefore the focus will be on the statement, especially given the precarious backdrop in Ukraine, Argentina, and the Middle East (to say nothing of the Chinese housing market). Will we see a bland assessment of the US economy that suggests a further tapering step next time, but little more? Or will there be more nuanced language to try to soothe nerves ahead of the “new, new normal” (i.e., a new normal economy but without QE). Odds look on the former, leaving markets to ‘join the dots’”.
Key quotes:
“Today we still have German CPI to look to, expected 0.2% MoM and 0.8% YoY, down from 1.0% in June: that will likely increase disinflation/”low-flation”/deflation concerns in Europe. There are also various Eurozone confidence surveys, which are expected to be broadly stable in the month: any downside surprises would amplify the theme mentioned above”.
“In the US there are a slew of key data. First up, ADP employment (which was bang on NFP last time): expectations are 230K (the same as payrolls on Friday). We also get Q2 GDP, where consensus is 3.0% vs. -2.9% QoQ annualized in Q1 – that sounds like a good bounce, but given it is QoQ it should arguably be stronger to suggest a healthy rebound. There may even be downside risks to this report based on the sluggishness seen in core durable goods orders in the quarter”.
“However, it’s all about the Fed today. There seems no chance of any surprise, with the recent run of data supporting a further USD10bn tapering step, taking QE down to “just” USD25bn per month. Therefore the focus will be on the statement, especially given the precarious backdrop in Ukraine, Argentina, and the Middle East (to say nothing of the Chinese housing market). Will we see a bland assessment of the US economy that suggests a further tapering step next time, but little more? Or will there be more nuanced language to try to soothe nerves ahead of the “new, new normal” (i.e., a new normal economy but without QE). Odds look on the former, leaving markets to ‘join the dots’”.