• Final releases of CPI across the European economies
  • US CPI in the spotlight during the American session
  • Two FED’s speakers on the agenda

There is no doubt that a passing week has been depressed by geopolitics which sparked a massive rout across equity markets around the world. The US dollar has been mixed so far and there is still a possibility to get a decent candlestick on a weekly time frame – for that reason the US inflation report and FED’s speakers could be a turning point. Beside the US print, there will be final readings of CPI coming from the European economies.

1:30 pm BST – US CPI: Expectations suggest that it should be an increase in case of CPI from 1.6% yoy to 1.8% yoy in July. In terms of a core gauge, it’s expected to come in at 1.7% yoy, the same value as it was in the prior month. However, one could say that a bar appears to be set quite high given a disappointing reading of PPI which was revealed yesterday. The chart below shows that both metrics are fairly closely correlated to each other, hence there is a chance to take markets by surprise later in the day. Nonetheless, if CPI meets forecast, it could help the US dollar and then could lead to a bullish candlestick on a weekly time frame for the USD index (USDIDX on xStation5).

link do file download linkUS PPI slowed down quite unexpectedly in July foretelling not well in terms of the CPI report. Source: Bloomberg, XTB Research

FED’s speakers (2:40 pm BST – Kaplan, 4:30 pm BST – Kashkari): Another FED’s meeting scheduled on September is getting closer, hence market participants might want to listen carefully FED’s members in order to be equipped with their newest views as far as the US economy’s outlook is concerned. Having assumed that US CPI meets a consensus, both FED’s speakers could have a change to talk up the greenback. Having said that, it’s worth recalling yesterday’s Dudley remarks which were quite blurry. On the one hand, he said that year over year inflation measures would be depressed for a while and he didn’t expect CPI to get back to 2% in medium term. On the other hand, he added that US inflation would increase ’over medium term’ toward 2% goal. Even as his remarks could have come from different speeches, those suggested lack of conviction.

6:00 pm BST – oil rigs count: Oil prices have been little volatile on the week staying above a crucial support level at $48 in case of the WTI grade. Recent reports from Baker Hughes showed a decreasing count of active oil rigs, hence if it’s a sustained trend, today’s report should show a similar pattern.

link do file download linkToday’s CPI report could be a tipping point for the USDIDX as the index could draw a bullish candlestick on a weekly interval. Source: xStation5