EUROPEAN SESSION

In the European session, we get the French and German inflation data. The French HICP Y/Y is expected at 3.2% vs 2.6% prior, but the focus will be on the core measure which ticked lower to 1.1% in the prior month. The ECB is currently debating whether a rate hike in October is warranted, so higher than expected underlying inflation in the Eurozone will likely prompt a rate hike at the upcoming meeting. The market is currently pricing a 40% chance.

The German HICP Y/Y is expected at 3.2% vs 2.9% prior, while the core measure remained unchanged at 2.4% in the prior month. The German data is generally the most important one as it’s the most influential for the Eurozone CPI calculation.

AMERICAN SESSION

In the American session, we have the US ADP report and the US PCE price index. The ADP is expected at 74.5K vs 38K prior, but it’s unlikely to be a market-moving release unless we see a surprising negative reading. The totality of the US jobs data has been pointing to a stable/strengthening labour market. 

The US PCE Y/Y is expected at 3.7% vs 3.7% prior, while the Core PCE Y/Y is seen at 3.3% vs 3.3% prior. The PCE is rarely a major market-moving release because it’s mostly “old news” as it can be accurately forecasted using inputs from the CPI and PPI reports. That’s why the CPI is always more important and the one that influences interest rate expectations the most. 

CENTRAL BANK SPEAKERS

• 15:45 GMT/11:45 ET – ECB’s Schnabel (hawkish – voter)
• 17:30 GMT/13:30 ET – Fed’s Barkin (neutral – voter)
• 19:25 GMT/15:25 ET – Fed’s Cook (neutral – voter)
• 21:10 GMT/17:10 ET – Fed’s Goolsbee (hawkish – non voter)

This article was written by Giuseppe Dellamotta at investinglive.com.