Investors will be eagerly awaiting the Fed’s minutes on Wednesday. At 8 p.m., their attention will in fact be entirely turned to the minutes of the meeting of July 26 and 27 last Federal Open Market Committee (FOMC), the institution’s monetary policy committee. With the ambition for operators, to detect elements likely to direct them to the extent of future rate hikes across the Atlantic. As a reminder, the July meeting led Jerome Powell and the eleven other members of the Board of Governors to raise, unanimously, by 75 basis points the rate of Fed-fundswithin a range of 2.25% to 2.50%.
New increases are planned for the future, but the firm Capital Economic anticipates that they will be more “ cautious “and that the American central bank” would only raise rates by 50 basis points in September “, with “falling inflation and further signs of economic weakness ” who appear. A scenario that would come to corroborate the declarations of Candace Browning, at the head of the research of the branch of investment of the American bank Bank of America (BofA Securities): Inflation will continue to fall “, she said this weekend. BofA Securities’ data analysts’ office predicts that the US price index will be ” broadly in line with the Fed’s 2% mandate by the end of 2024 “.
Focus on US retail sales
Earlier in the day and on the Old Continent, it is the estimate of the real Gross Domestic Product (GDP) of the euro zone, therefore adjusted for inflation, for the second quarter which will be scrutinized by the financial markets. It is expected to increase by 0.7% by the Bloomberg consensus compared to the first quarter of 2022. This would represent a slight increase of 0.2 points, as real GDP growth in the euro zone for the first quarter came out at 0.5. %.
On the other side of the Channel, in England, the evolution of the consumer price index for the month of July will be published by the Office of National Statistics. It was up sharply by 9.4% in June (year-on-year, ie the monthly growth rate compared to its level of the previous year). The 32 economists polled by Bloomberg expect an increase of 9.8% over one year for the month of July.
Return to the United States, where retail sales (excluding and with automobile) will be revealed at 2:30 p.m. The indicator measures the state of consumer spending by US households. June retail sales were up 1% and are expected by Bloomberg consensus at 0.1% for the month of July. Excluding automobiles, they were also up 1% in July, but are expected to fall by 0.1% for July.