EUROPEAN SESSION

In the European session, we get the Eurozone Flash CPI report. The headline CPI Y/Y is expected at 3.6% vs 3.2% prior, while the Core CPI Y/Y is seen at 2.5% vs 2.4% prior. Given the recent ECB commentary, we will likely need an upside surprise for the central bank to consider a rate hike in October. An in-line or even lower than expected figures will give the ECB enough reasons to keep the policy rate steady.

AMERICAN SESSION

In the American session, we have the US NFP report. The NFP is expected at 90K vs 162K prior, while the unemployment rate is seen remaining unchanged at 4.1%. The Average Hourly Earnings Y/Y is expected at 3.2% vs 3.1% prior, while the M/M measure is seen at 0.3% vs 0.3% prior. 

The expectations for a rate hike in October have fallen to 23% following the dovish comments from Fed’s Williams and Fed’s Jefferson. This shows once again that there’s low appetite for too much tightening at the Fed, so we would need a blockbuster NFP report to lift October probabilities again.

Weak data might not change much in the bigger picture because the totality of the US jobs data has been strong, but it might further reduce the odds for an October hike in the short-term.

CENTRAL BANK SPEAKERS

• 07:00 GMT/03:00 ET – ECB’s Moulin (neutral – voter)
• 07:30 GMT/03:30 ET – ECB’s Cipollone (neutral – voter)
• 11:30 GMT/07:30 ET – ECB’s Vujcic (neutral – voter)
• 14:00 GMT/10:00 ET – Fed’s Logan (hawkish – voter)
• 19:35 GMT/15:35 ET – ECB’s Nagel (hawkish – voter)

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