Economic calendar: Fed decision, US ADP report and flash CPI from Eurozone in the markets spotlight

• U.S. index contracts gain ahead of Fed meeting, semiconductor manufacturers gain after Q2 results
• On the wave of gains in Asia and the States, European benchmarks also traded higher; in the first reaction, the Japanese yen strengthened after an unexpected 15bp rate hike by the BoJ (to 0.25%)
• The market awaits the Fed decision (7 PM BST) and Federal Reserve Chairman Powell's press conference (7:30 BST)

Microsoft's solid report initially disappointed investors, but AMD's better-than-expected Q2 results and the company's higher forecasts boosted sentiment among semiconductor companies, leading to an increase in bullish activity in Nasdaq 100 contracts. After today's BoJ decision, the tone remains relatively 'dovish' despite the rate hike.

The market's attention will shift to 8:00 pm, when we will learn the Fed's decision; the market is pricing a slight chance of a cut in July, although such a scenario definitely cannot be ruled out.  Powell will speak at 8:30 pm, which will shed more light on whether early autumn will prove to be a suitable date for the first monetary easing in the US since 2020. 

Also important for investors will be the ADP reading (14:15), which will show the change in employment in the US private sector. Some volatility can be expected in oil, due to changes in inventories according to the EIA at 4:30 p.m. For investors on the Old Continent, the most important will be the publication of preliminary inflation from the Eurozone, for July, which is scheduled for 11:00 a.m. The market expects a slight decrease in the y/y growth in core inflation and CPI unchanged, at 2.5%.

Macro calendar

7 AM BST, Germany - Import prices in June: 0.4% m/m vs. 0.1% forecast and 0.1% previously

7:55 AM BST, France - CPI inflation for July: 2.4% forecast vs. 2.2% previously (0.3% m/m vs. 0.1% previously)

8:55 AM BST, Germany - unemployment rate for July: 6% forecast vs. 6% in June (up 15k vs. 19k previously)

9 AM BST, Switzerland, ZEW index (previously 17.5)

9 AM BST, Poland, CPI inflation for July: forecast 4.4% y/y vs. 2.6% previously (1.6% m/m forecast vs. 0.1% m/m previously)

10:00 AM BST, Eurozone - CPI inflation for July: 2.5% forecast vs. 2.5% previously

• Core CPI 2.8% y/y forecast vs. 2.9% previously

1:15 PM BST USA - ADP report for July: 150k forecast vs. 150k previously

1:30 PM BST, Canada, monthly GDP reading, for May: 0.1% forecast vs. 0.3% previously

2:45 PM BST, USA, Chicago PMI for July: 45 vs 47.5 previously

3 PM BST US, signed house purchase contracts for June: 1.4% forecast m/m vs -2.1% previously

3:30 PM BST, US, Q2 2024 labor costs: 1% forecast vs. 1.2% previously

3:30 PM BST US, EIA oil inventories change: Down -1.1 million barrels vs -3.74 million previously

• Gasoline inventories: down -1.29 million barrels forecast vs -5.57 million previously
• Distillate stocks: Decrease -900,000 vs -2.75 million barrels previously

7 PM BST USA, Fed decision: 5.5% forecast vs. 5.5% previously

7:30 PM BST, USA, Jerome Powell press conference

Company results 

Boeing, Mastercard

Speeches by central bankers

20:30 - Fed, Powell