UK Economy Beats Expectations as US Data Takes Center Stage
The UK's economy showed a stronger-than-expected performance in June, according to a report released today. The services sector led the way, beating expectations by a wide margin. However, this news won't influence the Bank of England's monetary policy as it prefers to hold interest rates steady unless there is clear inflation resurgence.
The European session had little else on its agenda beyond low-tier releases from Spain and the Eurozone. The final Consumer Price Index (CPI) reading for Spain was released, but this data isn't expected to change anything for the European Central Bank (ECB).
In contrast, the US has a more packed schedule. Today's release of the Producer Price Index (PPI) is expected to show a 4.9% year-over-year increase in prices, while core PPI is seen at 4.1%. The Jobless Claims data will also be watched closely, with an expected reading of 202K claims.
The Federal Reserve's focus on inflation means that these numbers won't have much impact on the September rate hike probabilities. However, they may provide some insight into the PCE calculation and the Fed's thinking behind its monetary policy decisions.