Next week to watch (14 – 18.08.)

11.08.2023 13:02|Investment Advice Department, Conotoxia Ltd.

August is traditionally a quieter month after most companies have reported their second-quarter results, and many are enjoying their summer holidays. Next week, the UK and Eurozone announce their CPI data for July, and the Eurozone also publishes its update on the second quarter GDP growth. 

Wednesday, 16.08. 06:00 GMT, UK Consumer Price Index (CPI) YoY (July)

The CPI index measures changes in the prices of consumer goods and services. It covers different types of products, such as food, fuel, transportation services, cosmetics, household goods, clothing, and many others. The purpose of the CPI index is to measure the increase or decrease in the cost of living for consumers. As the CPI index rises, consumers' purchasing costs increase, affecting their money's purchasing power. The CPI index is used to monitor inflation or the overall rise in prices in the economy. It allows us to assess whether prices are rising too fast or too slowly and to determine what economic policy measures should be taken to offset the adverse effects of inflation.

In June 2023, consumer price inflation in the United Kingdom experienced a fairly strong decline to 7.9% from 8.7% a month before, marking the lowest point since March 2022. This was also slightly below the market's forecast of 8.2%. The decline was mainly due to a fall in fuel prices. Moreover, the core inflation rate, which excludes volatile items like energy and food, also decreased to 6.9% after hitting a 31-year high of 7.1% in May. Despite this recent deceleration, both inflation rates remain notably higher than the Bank of England's target of 2.0%. As a result, the central bank has room to continue its ongoing efforts to tighten monetary policy.

Source: Tradingeconomics.com

On the one hand, if the reading is higher than expected, it may favour a fall in the GBP. Meanwhile, it could also be a stimulus for the BoE to raise interest rates and reduce the money supply causing an increase in the GBP. On the other hand, if the reading is lower than expected, it may give the BoE an argument to stop its policy of raising interest rates.

Impact: GBP

Wednesday 16.08. 09:00 GMT, Eurozone Gross Domestic Product (GDP) QoQ (2Q)

Gross domestic product (GDP) indicates the total value of goods and services produced in a country (or a currency union in this case) for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and is growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy performs weaker than anticipated.

According to an initial assessment, the economy of the Eurozone expanded by 0.6% year-on-year during the second quarter of 2023. This growth rate represents a decrease from the 1.1% expansion recorded in the previous quarter but slightly exceeded the market's predicted rate of 0.5%. Notably, this marks the slowest growth rate since the recession period of 2020-21, which may be attributed to a significant decline in real incomes and a notable increase in interest rates.

Source: Tradingeconomics.com

Higher-than-expected reading may have a bullish effect on the EUR, while a lower-than-expected reading could be bearish for the EUR.

Impact: EUR

Friday, 18.08. 09:00 GMT, Eurozone Consumer Price Index (CPI) YoY (July)

According to preliminary estimates, the annual inflation rate in the Eurozone fell for the third consecutive month to 5.3% in July 2023, down from 5.5% in June and in line with market expectations. The recorded rate is the lowest observed since January 2022. This reduction may be attributed to a further decline in energy prices, which dropped by -6.1% as opposed to the previous -5.6%. Additionally, there was a slowdown in the cost of items like food, alcohol, and tobacco (10.8% compared to 11.6%), as well as non-energy industrial goods (5% compared to 5.5%). Conversely, the inflation rate for services continued its upward trajectory, reaching 5.6% from 5.4%.

In contrast, the core inflation rate, which excludes energy, food, alcohol and tobacco prices, held steady at 5.5%, beating forecasts of 5.4%. This is the first time since 2021 that the core rate has exceeded the headline rate. Compared to June, the CPI in the Eurozone experienced a minor decline of 0.1%.

Source: Tradingeconomics.com

On the one hand, if the reading is higher than expected, it may favour a fall in the EUR. Meanwhile, it could also be a stimulus for the ECB to raise interest rates and reduce the money supply causing an increase in the EUR. On the other hand, if the reading is lower than expected, it may give the ECB an argument to stop its policy of raising interest rates.

Impact: EUR

Stocks to watch

Home Depot (HD) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 4.45. Positive earnings surprise in 9 out of the last 10 reports. Time: Tuesday, August 15, before the market opens. 

Cisco (CSCO) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 1.06. Positive earnings surprise in 10 out of the last 10 reports. Time: Wednesday, August 16, after the market closes. 

Walmart (WMT) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 1.68. Positive earnings surprise in 8 out of the last 10 reports. Time: Thursday, August 17, before the market opens. 

Applied Materials (AMAT) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 1.74. Positive earnings surprise in 8 out of the last 10 reports. Time: Thursday, August 17, after the market closes. 



Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service)

Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73,02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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Santa Zvaigzne-Sproģe, CFA

Santa Zvaigzne-Sproģe, CFA

Head of Investment Advice Department

A certified financial analyst with a broad experience in financial markets obtained working as a broker and securities specialist in various financial institutions across the Baltics.

In addition to obtaining the prestigious CFA license from CFA Institute and Advanced Certificate from CySEC in 2022 as well as Investment Advisor’s license from Baltic Financial Advisor’s Association in 2019, Santa holds MBA from Swiss Business School in Switzerland and master’s degree in finance from BA School of Business and Finance in Latvia.


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76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.