If last week’s market mover was the July labor market data, even in the octave that has just begun the market will focus on a data coming from the US. This is the American inflation data scheduled for next Wednesdaywith the general data that should slow down on an annual basis according to market consensus (the core one is expected to accelerate).
According to analysts’ expectations, the general figure should show a slowdown to 8.7% from 9.1% mainly due to the drop in gasoline seen in the last month, but the core one is instead expected to accelerate to 6.1% from 5 , 9%. “It will be important to verify whether the shelter component in particular will begin to show signs of a slowdown”, the strategists of Mps Capital Services. The interventions of some Fed members, mainly non-voting members, should also be monitored, as they will all take place after the publication of the data on consumer prices in July.
How will the Fed move?
Now the question that hovers always concerns the Fed, what will it do on the interest rate front? As he points out Gabriel Debach, market analyst at eToro, “The surprisingly strong US labor market report on Friday reinforced expectations that the Federal Reserve will continue to aggressively tighten interest rates.” The US economy unexpectedly added 528,000 jobs in July, more than double the 250,000 expected by economists, driving up the dollar and Treasury yields and putting pressure on gold. “Markets are betting now that the Fed will raise rates by 75 basis points in September – the odds of that hike last week were 29% versus the current 70.5%,” adds the expert.
Data on inflation also coming from China (also on the agenda on Wednesday 10 August), with analysts predicting an acceleration in prices, although the absolute level of prices is very moderate compared to the values present in Western economies. The final inflation estimates for the month of July of three big names in the euro zone will also be published: Germany, France and Italy.
Piazza Affari restarts from the decision of Moody’s
Meanwhile, for the latter, we look at the recent decision by Moody’s which lowered the prospects on the Italian rating to negative. “Despite growth and fiscal developments have reserved positive surprises in 2021 and early 2022, there are material risks on the growth prospects linked to the execution of the NRRR and energy supplies”, warns Moody’s, adding: “The end of the government Draghi on 21st July and the early elections on 25th September 2022 (earlier than in spring 2023) increase political uncertainty, with a difficult economic and market context in the background ”.