Following the release of the US NFP report, markets are turning their attention to another piece of crucial US data - CPI report for July. Price growth data and recent jobs report may be defining for the future monetary policy of the Fed, especially the size of rate hikes. Apart from the US CPI report, traders will also focus on oil and grains data. Be sure to watch USDJPY, OIL and WHEAT next week.
A key macro data of the week - US CPI inflation report for July - will be released on Wednesday at 1:30 pm BST. Market expects a long-awaited deceleration in US price growth with headline CPI dropping from 9.1% to 8.9% YoY. However, core gauge is expected to tick higher from 5.9 to 6.1% YoY. Deceleration in price growth may lead to easing of Fed rate hike bets, which would be negative for the US dollar and, in turn, positive for gold. USDJPY has managed to halt recent downward correction but remains dependent on moves in US yields.
In spite of OPEC+ deciding on a barely noticeable 100k increase in output quotas for September, oil prices moved lower this week pressured by rising risk of recession. Crude prices moved to levels not seen since the beginning of a Russian invasion of Ukraine in late-February 2022. Big and unexpected build in US oil inventories also helped push prices lower, therefore API report on Tuesday evening and DOE report on Wednesday afternoon should be watched closely by oil traders next week.
Russian invasion of Ukraine limited exports of Ukrainian grains, threatening a global food crisis. The UN and Turkey brokered a deal to resume exports and first shipments of Ukrainian wheat have already left the country. Nevertheless, the situation remains tense and production outlook at other major producers is on watch. The upcoming WASDE report (Friday, 5:00 pm BST) will show how those changed and may be a mover for WHEAT and other grain markets.