Eurozone Prelim GDP and CPIs overview
At 0900 GMT, the first estimate of the Eurozone inflation and second-quarter GDP figures will be reported.
The consensus amongst traders expects the bloc’s economic growth to come in a tad weaker at 0.2% inter-quarter in Q2, while on an annualized basis, is expected to arrive at 1.0%.
Meanwhile, the headline CPI is anticipated to drop to 1.1% y/y, compared to 1.3% growth seen previously while the core inflation is seen lower at 1.0% y/y during the reported month vs. 1.1% last.
How could affect EUR/USD?
At the press time, the EUR/USD pair trades flatlined near 1.1155 levels, having reversed from 1.1162 highs after the Spanish Q2 preliminary GDP rate arrived at 0.5% q/q vs. 0.6% expected.
From a technical perspective, a positive surprise in both the Eurozone GDP and CPI data could push the EUR/USD pair towards the last Thursday’s highs of 1.1189. A break above the last could open doors for a test of the 1.1200 level. On the flip side, disappointing numbers could drag the spot back towards the 2019 lows of 1.1102.
The reaction to the macro news is likely to be limited ahead of the all-important FOMC decision, with a 25 bps Fed rate cut widely expected.
Key Notes
Eurozone: GDP and Inflation amongst market movers today – Danske Bank
EUR/USD analysis: Holds steady near mid-1.1100s, awaits the key FOMC decision
Federal Reserve Preview July 30-31 FOMC: Is this a rate cycle?
About Eurozone Prelim GDP
The Gross Domestic Product released by the Eurostat is a measure of the total value of all goods and services produced by the Eurozone. The GDP is considered as a broad measure of the Eurozone economic activity and health. Usually, a rising trend has a positive effect on the EUR, while a falling trend is seen as negative (or bearish).
About Eurozone Prelim CPIs
The Euro Zone CPI released by the Eurostat captures the changes in the price of goods and services. The CPI is a significant way to measure changes in purchasing trends and inflation in the Euro Zone. Generally, a high reading anticipates a hawkish attitude which will be positive (or bullish) for the EUR, while a low reading is seen as negative (or bearish).
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