Investing.com - In the week ahead, investors will be looking to Wednesday’s highly-anticipated Federal Reserve policy statement for fresh guidance on the pace of interest rate hikes over the next several months.
Elsewhere, market participants will be awaiting a monetary policy announcement from the Bank of Japan on Friday, amid growing expectations for further stimulus.
Traders will also be looking ahead to data on U.S., U.K. and European second quarter gross domestic product for fresh indications on the health of the global economy in wake of Britain's shock vote last month to exit the European Union.
Ahead of the coming week, Investing.com has compiled a list of the five biggest events on the economic calendar that are most likely to affect the markets.
1. Fed rate decision
The Federal Reserve is not expected to take action on interest rates at the conclusion of its two-day policy meeting at 18:00GMT, or 2:00PM ET, on Wednesday, as policymakers wait for the dust to settle from Britain's decision to leave the EU.
A recent string of better than expected data reignited speculation that the U.S. central bank will raise interest rates before the end of the year. Interest rate futures are currently pricing in a 16% chance of a rate hike by September. December odds were at 45%, compared with less than 20% a week ago and up from 9% at the start of this month.
2. BOJ policy announcement
The Bank of Japan's latest monetary policy announcement is due during Asian morning hours on Friday. Central bank Governor Haruhiko Kuroda will hold a press conference afterward.
Speculation has mounted in recent weeks that the BOJ will cut its main interest rate deeper into negative territory and expand its monetary stimulus program in an effort to help the domestic economy emerge from deflation and fend off possible adverse effects from Brexit.
A recent Reuters poll showed 85% of analysts expect the BOJ to ease on July 29, alongside the fiscal spending boost Prime Minister Shinzo Abe is set to announce this month.
The BOJ has already implemented negative interest rates and is printing 80 trillion yen ($750 billion) a year to stimulate inflation after decades of deflation and stagnant growth, yet inflationary expectations appear to be weakening.
3. U.S. advanced second quarter growth data
The U.S. is to release preliminary figures on second quarter economic growth at 12:30GMT, or 8:30AM, Friday. The data is expected to show that the economy expanded at a healthy 2.6% annual rate in the April-to-June quarter, improving from growth of 1.1% in the first quarter.
Recent U.S. economic data, including June housing starts, retail sales, ISM manufacturing and employment were all better than expected, suggesting that economic growth regained speed in the second quarter.
4. U.K. preliminary Q2 GDP figures
The Office for National Statistics is to produce preliminary data on U.K. economic growth for the second quarter at 08:30GMT, or 4:30AM ET, on Wednesday, although the number will be seen as less relevant in the wake of the Brexit decision.
The report is forecast to reveal the economy grew 0.5% in the three months ended June 30, after expanding 0.4% in the preceding quarter, confirming that the British economy went into the EU referendum on a solid footing.
Growth is expected to slow down sharply in the second half of the year as U.K. businesses face uncertainty over the country’s future direction in wake of the Brexit vote.
5. Euro zone second quarter flash GDP
The euro zone will publish its first estimate on second quarter economic growth at 09:00GMT, or 5:00AM ET, on Friday. The consensus forecast is that the report will show the economy grew 0.3% in the April-June period, after expanding 0.6% in the preceding three months.
Stay up-to-date on all of this week's economic events by visiting: http://www.investing.com/economic-calendar/