Market movers today
Today, the euro area GDP figures for Q2 are due out, and we estimate growth of 0.5% q/q. The solid euro area recovery should have continued in Q2, also reflected in the declining unemployment rate. The growth figure could get more attention than usual amid the ECB's increased focus on the stronger economic growth and less so on the lack of underlying price pressure, as the latter should eventually strengthen when the recovery continues.
In the US, the focus is on the PCE headline and core inflation figures for June, which we estimate will be muted. We still think risks are skewed towards the Fed pausing its hiking cycle due to continuing low inflation, which may not be just 'transitory' as the Fed claims, (see FOMC review - Smidgen dovish but it does not alter the overall picture , 26 July). Markets will also watch out for further insights into the Fed's monetary policy stance, as the Fed's Mester and Williams (both FOMC voting members) will speak today.
Manufacturing PMI data for July is also out for a range of European countries, including the UK, Italy and Spain. In the US, we will get the ISM manufacturing index, which we estimate moderated slightly in July to 55.5 from 57.8, in line with the Markit PMI.
In the Scandies, PMI manufacturing data for July is due out for Sweden and Norway.
To read the entire report Please click on the pdf File Below: