Home Agenda Coming Up - Fed and BCB to Cut Rates and Jobs Friday

Coming Up – Fed and BCB to Cut Rates and Jobs Friday

Stockholm (Ekonamik) – The 31st week of 2019 will be extremely busy. While the focus of the week will be Wednesday and Thursday, when interest rate decisions will take place in the USA, Brazil, Saudi Arabia and the UK, plenty of important data updates on inflation, unemployment and GDP will be released in the preceding days.

While the BoJ is expected to stay the course at next week’s meeting, the same is not true of the USA and Brazil. With regards to central banks, the Federal Reserve is widely expected to raise interest rates. “The Fed signalled at the June FOMC meeting that interest rates are likely to be cut over the coming quarters,” said Anders Bergvall, Senior Economist for the USA at Handelsbanken Capital Markets. “Markets are currently pricing in a high probability of a rate cut in July. It is shaping up to be a close call, but we suspect that a first 25bp cut will be on July 31. Overall, we anticipate that the Fed to cut rates by a cumulative 75bp, at a quarterly pace until early next year.”

Further to the South, Mario Mesquita, the Chief Economist of Brazilian banking giant Itau is expecting a 50bps rate cut at this meeting of the BCB. “We expect the Copom to restart the easing cycle in July with a 50-bp cut, greater than we initially forecasted (25-bp), due to favorable external winds and lower risks in the domestic scenario that result from progress in the pension reform,” he explained in a macro scenario note at the start of the month. “This cut is likely to be followed by two additional 50-bp cuts, which would take the Selic rate to 5.00% before year-end. We expect the Selic to remain at this level throughout 2020.”

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While the expectation is that the BoE will not cut rates at this meeting, RBC has recently reported it expects the UK’s central bank to cut rates should the UK decide to unilaterally withdraw from the EU with no deal on October 31st, as promised by Boris Johnson.

Asides from GDP and unemployment data for the Euro-Zone, the main data point this week is going to be the USA‘s Non-Farm Payrolls and the unemployment rate in July. Following a buoyant performance in June, all eyes will be on the US job market on Friday.

29/07/2019MondayCPI Inflation (Spain) (July)
Unemployment Rate (Italy) (June)
Dallas Fed Manufacturing Index (USA) (July)
Bond Issuance (Lithuania)
30/07/2019TuesdayBoJ Interest Rate Decision
Unemployment Rate (Japan, South Africa) (June)
GDP Growth Rate (France) (2019Q2) (Prel)
CPI Inflation (Germany) (2019Q2) (Prel)
Bond Issuance (Germany, Italy)
US-China Trade talks
31/07/2019WednesdayFOMC Monetary Policy Meeting (USA)
BCB Monetary Policy Meeting (Brazil)
Saudi Arabian Monetary Authority Meeting (Saudi Arabia)
TCMB Meeting minutes (Turkey)
CPI Inflation Rate (Australia) (2019Q2)
Unemployment Rate (Germany; Brazil, €Z, Italy) (July; June)
CPI Inflation Rate (€Z, France, Italy) (July)
GDP Growth (€Z, Spain, Italy, Mexico) (2019Q2)
Bond Issuance (Germany)
US-China Trade talks
01/08/2019ThursdayBoE Monetary Policy Meeting (UK)
CPI Inflation (South Korea) (July)
Manufacturing PMI (Australia, Japan, Indonesia, South Korea, India, Russia, Turkey, Spain, Italy, France, Germany, €Z, UK, USA, Mexico) (July) (Final)
Bond Issuance (Japan, Hungary, France, Spain)
FridayBoJ Monetary Policy Meeting Minutes
Unemployment Rate (USA) (July)

Filipe Wallin Albuquerque
Filipe Wallin Albuquerque
Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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