25 July, AtoZForex – Stepping into the final week of the month, the Federal Reserve policy meeting will be the most important event on the economic calendar this week. Other activities on the daily Forex news and trade opportunities this week include the UK’s latest prelim GDP figures and more.
#1 New S&P 500 highs
Despite global challenges of Brexit, global economic growth projections are being cut, and monetary policy is losing its effectiveness. Yet, the Standard & Poor’s 500 index made a new all-time high last week. Goldman Sachs thinks this momentum is unlikely to continue.
Opportunity: Get ready to sell S&P and Dow Jones on signs of weakness
#2 Verizon Yahoo acquisition?
Based on the information gathered by AtoZ Forex US team, the market is about to open on Monday for a Tech surprise as Verizon Yahoo acquisition is about to be announced. The Verizon Yahoo Acquisition news is expected to hit the market by Monday.
3# BOJ Kuroda: No possibility for helicopter money
Speculators have been betting on the yen with a view that the Bank of Japan was considering “helicopter money.” During the Asian trading session on Friday, the yen was flat against the dollar and the euro. However, into the London trading session, the yen had weakened against the dollar and euro after BOJ governor Kuroda debunked the idea of helicopter money and that the central bank was not considering the option.
4# S&P cuts Turkey credit rating
The Standard & Poor’s global rating firm has reviewed Turkey’s rating in May. It signaled on Monday about an unscheduled review as an assessment of the failed coup consequences. Later on, on Wednesday the firm said that growing political fragmentation and polarization were weakening the country’s economy. Hence, a cut to double-B, with a negative outlook.
#5 German Ifo Business Climate
All new data will now be interpreted in relation to the effect of Brexit on the European economy. Business confidence in Germany is forecast to drop to 107.7 from 108.7 last month. The ZEW economic confidence released last week already showed grim conditions of falling confidence.
Opportunity: Sell Euro on bad report
#6 ECB keeps monetary policy unchanged
The European Central bank opted to keep its monetary policies on hold with the aim of observing the economic conditions after the Brexit vote before making a decision as to the next course of action. The Euro fell and is likely to remain low.
#7 UK Prelim GDP q/q
The prelim GDP for the UK is forecast to come at 0.5%, a potential increase from previous 0.4% reported. The ECB has already stated that there are no real signs of the Brexit effect hitting the economy just yet.
#8 July Fed rate decision
With strong arguments both for and against rate hikes, the final decision of the Fed as regards rate decision remains uncertain. With the labor market showing sustained strength and recent data looking upbeat, many analysts expect rate hikes to come soon. If the Fed fails to proceed with a rate hike, the dollar is likely to halt its recent strengthening.
Opportunity: Short USD if Fed does not hike rates
#9 Bank of Japan monetary policy statement
Having already debunked any possibilities of implementing helicopter money, Kuroda and his cohorts will be expected to release the latest Monetary Policy Statement this week. They would have taken into consideration the relatively tight labor market in terms of a low unemployment rate and a high jobs-to-applicant ratio, along with recent poor consumption.
#10 US Advance GDP q/q
This US advance GDP is another key data to be watched on the daily Forex news and trade opportunities this week. The Fed will be more confident in raising rates if there is a robust GDP reading, especially as strong data would reinforce positive sentiment towards the outlook. However, the Fed rate decision comes two days ahead of this report. Hence, the market effect of the advance GDP release will be tended towards further monetary policy adjustments to come.
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