It’s monetary policy time!
After the ECB’s meeting on 20 July, next week will see the FOMC convening on Tuesday/Wednesday – a meeting without a scheduled press conference, which reduces the chance for a significant policy change. CIO only expects the Fed to hike interest rates later this year and eventually begin a reduction of its balance sheet. But the meeting will be closely monitored for hints regarding the timing and design, especially amid the backdrop of lackluster inflation.
In emerging markets, central bank meetings will take place in Brazil, Turkey, and Russia. In Brazil, market observers expect another policy rate cut by 100bps to 9.25 percent amid declining inflation. Since the beginning of the year, monetary policy has tightened significantly in Turkey and CIO expects the central bank to maintain a hawkish policy stance amid elevated inflation.
In Russia, the market consensus points to a 25bps cut to 8.75 percent. Nonetheless, the Bank of Russia is likely to act with prudence amid lingering upside risks to inflation. Apart from central bank decisions, the coming week offers consumer and business confidence indicators for the US and Germany, second quarter GDP releases for the US and several European economies, including the UK, as well as CPI releases in Australia, Japan, and Germany.
（By UBS）
