Summer's Final Squeeze: Fed Meeting, Inflation Data, and Tech Earnings Loom Large
The final week of summer is packed with significant events that may influence market movements heading into autumn. Key releases include the US Personal Consumption Expenditures (PCE) inflation report, Tokyo Core CPI data, and Nvidia's quarterly earnings.
The PCE index is expected to rise 0.1% month-on-month in July, while the annual rate is forecasted to ease to 3.6% from 3.7%. This reading may carry added weight for the Federal Reserve ahead of its September meeting, as it could indicate a potential shift in monetary policy.
The US dollar has been weak over recent weeks, but a possible interest rate hike could boost its value against major currencies like the euro, which has been a beneficiary of the dollar's decline. However, EUR/USD appears overbought, with an RSI above 70 and trading above its upper Bollinger Band.
Nvidia is expected to report strong quarterly earnings, with revenue projected to rise 96.9% year-on-year and net income nearly doubling to $2.09 a share. Analysts anticipate further growth in Q3, but the company's shares may face downward pressure following the results due to potential dealer hedging flows.
Tokyo Core CPI data is also set for release, which could impact AUD/JPY as it trades near ¥113 and above its moving averages. A breakout above ¥114.60 could send the FX pair significantly higher, while a retreat toward the lower end of the range near ¥108 may signal weaker momentum.