Following last Friday's US jobs report, investors' attention is likely to turn to fresh US inflation data in the new trading week. Stimulus from the eurozone could in turn come from the European Central Bank. The stock markets are therefore facing another stress test that needs to be taken seriously.
US labor market data mixed - Mixed feelings among investors
Mixed US labor market data from last Friday is likely to keep market participants busy in the first half of the week. A total of 142,000 new non-farm jobs were created last month, slightly fewer than expected (160,000). Conversely, the unemployment rate fell from 4.3 percent to 4.2 percent. It is possible that the jobs data caused more uncertainty rather than further underpinning the interest rate cut fantasies. In this context, an XXL rate cut at the next meeting in mid-September seems to be anything but a foregone conclusion.
Economists expect a significant decline in inflation - interest rate cut fantasies could gain momentum
While there are fewer relevant dates on the economic data calendar on Monday and Tuesday, investors' attention is likely to turn to Wednesday, when new US consumer price data will be published at 14:30. According to expectations, inflation data including the drivers energy and food could have risen by 2.60% compared to the same month last year and thus significantly less than in the previous month (2.90%).
ECB key interest rate decision also likely to attract interest on Wall Street
The ECB meeting on Thursday could provide impetus. The monetary watchdog usually announces its key interest rate decision at 2:15 pm. The ECB is expected to cut the key interest rate by a further 0.25 percentage points to a level of 4.00%. Keep an eye on the statement and press conference from 14:45.
Between the ECB key interest rate decision and the press conference, however, fresh US producer prices (14:30) could cause movement, which usually provide an important indication of future inflation trends.
Initial claims for US unemployment benefits are also likely to be of interest at the same time, especially after the recent publication of the US labor market report.
Last but not least, preliminary consumer sentiment data from Michigan will be on the agenda on Friday (16:00).
