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Below the Quote on Coming Week Market Outlook by Alex Volkov, Market Analyst at VT Markets

Market expectations for two Federal Reserve rate cuts this year remain unchanged. Despite the Fed's new forecasts for monetary policy, including an interest rate cut in 2024, markets anticipate the first cut in September and another in November. The next Fed meeting is scheduled for the end of this month. Fed Chairman Jerome Powell has emphasized that the decision on interest rates will depend on incoming macroeconomic data and inflation trends.

China CPI:

Forecast: Decline to 0.2% y/y. The CPI data will reflect consumer price dynamics in China. Higher-than-expected inflation could trigger fiscal tightening by the People's Bank of China, potentially strengthening the yuan and commodity currencies like the Australian dollar.

US Producer Price Index (PPI):

Measures changes in wholesale prices. Higher PPI suggests increased consumer inflation, potentially strengthening the USD.

University of Michigan Consumer Confidence Index (preliminary release):

Reflects consumer sentiment. An increase will support the USD, while a decrease could weaken it.

Forecast to show a slowdown to 3.1% y/y. This data is crucial for gauging the Fed's next moves. A slowdown supports expectations for rate cuts, affecting the USD and broader markets.

The upcoming week will be pivotal, with significant data from China, Germany, and the US. The US inflation report on Thursday will be the central focus, potentially influencing Fed rate decisions and market sentiment. Traders should prepare for heightened volatility, particularly around key data releases.

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