Next week to watch (9-13.09.2024)

06.09.2024 13:06|Analyst Team, Conotoxia Ltd.

The US bond yield curve, which had been inverted for the past two years, had returned to normal. This meant that short-term bonds offered higher yields than long-term bonds, which was counterintuitive. Historically, an inversion of this curve has always presaged a recession within a few to several months.  In the coming week, Thursday's ECB interest rate decision, preceded by inflation readings in Germany and the US, will be key for investors.

Table of contents:

  1. German consumer price index (CPI) annualised (August)
  2. US consumer price index (CPI) annualised (August)
  3. Eurozone interest rate decision

Tuesday, 10.09, 8:00 CET, German consumer price index (CPI) annualised (August)

According to preliminary estimates, Germany's annual inflation rate fell from 2.3 per cent in July to 1.9 per cent in August 2024, the lowest level since March 2021. Compared to the previous month, the CPI fell by 0.1 per cent Meanwhile, an increase of 0.1 per cent was expected.

Analysts' consensus is for CPI inflation to remain at 1.9 per cent.

graph inflation Germany

Source: Tradingeconomics.com

A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.

Impact: EUR/USD, EUR/PLN

Wednesday, 11.09, 14:30 CET, US consumer price index (CPI) annualised (August)

US annual inflation fell to 2.9 per cent in July 2024, the lowest level since March 2021, down from 3 per cent in June. Housing, transport and clothing costs declined, while food inflation stabilised at 2.2 per cent.

Analysts' consensus forecasts, a further decline in CPI inflation to 2.6 per cent.

graph US inflation

Source: Tradingeconomics.com

A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.

Impact: EUR/USD, USD/PLN

Thursday, 12.09, 14:15 CET, Eurozone interest rate decision

The ECB kept interest rates unchanged at its July meeting, in line with expectations. The main rate remains at 4.25 per cent. Despite high price pressures and inflation in the services sector, the ECB forecasts that inflation will remain above target until 2025. The Bank faces a difficult choice: to continue cutting rates, in line with market expectations and anticipated cuts in the US, or to maintain them at current levels.

Analysts' consensus is for a 25bp cut in interest rates, to 4.00 per cent.

ECB interest rate graph

Source: Tradingeconomics.com

A higher-than-expected interest rate could be bullish for the EUR, while a lower-than-expected interest rate could act bearishly on the EUR.

Impact: EUR/USD, EUR/PLN

 

Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)

The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results.

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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.