Talking Points
- The European Central Bank, Germany’s ZEW index and UK inflation top the economic calendar.
- In this video, DailyFX’s Martin Essex and Katie Pilbeam discuss the likely impact on the markets.
- Check out our brand new Trading Guides: they’re free and have just been updated for the third quarter of 2017
Monetary policy is expected to remain a key focus in the week ahead, especially in Europe where the European Central Bank meets to discuss its next interest rate decision. A move is not on the cards but all market players will be looking for clues in ECB chief Mario Draghi’s speech at the press conference for how long easy monetary policy is expected to last. As always, his comments will be crucial for EUR/USD.
Elsewhere, traders in GBP/USD will be looking out for the UK inflation data. The CPI jumped 2.9% year/year last month, the highest rate in four years, as the weak Pound pushed up the price of imports. The number is expected to remain at this rate; the last time inflation reached 2.9% was June 2013. This means the CPI report will continue to outpace the Bank of England's 2% target and put pressure on policymakers to consider hiking rates beyond 0.25%.
The German ZEW confidence report is also due and another solid number is expected, but there could well be a drop from 18.6 to 18. The German economy has been firing on all cylinders recently, which in turn creates more of a headache for the ECB, which is having to control the diverse economies of the EU. Traders in the DAX, particularly, will need to keep a close eye on the numbers.
--- Written by Martin Essex, Analyst and Editor, and Katie Pilbeam
To contact Martin, email him at martin.essex@ig.com
Follow Martin on Twitter @MartinSEssex
To contact Katie, email her at katie.pilbeam@ig.com
Follow Katie on Twitter @KatiePilbeamIG
For help to trade profitably, check out the IG Client Sentiment data
And you can learn more by listening to our regular trading webinars; here’s a list of what’s coming up
