Among the economic indicators scheduled for release this week, speculation over monetary policy in Japan and the US is likely to sway the foreign exchange market. The second preliminary GDP estimate for the April-June quarter, due on the 8th, is expected to be revised upward to an annualized 1.8% quarter-on-quarter growth, and an upward surprise would support expectations of further rate hikes by the Bank of Japan, leading to yen buying. On the 10th, the ECB is expected to raise its policy rate by 0.25 percentage points, with the focus on President Lagarde's press conference. The UK's July GDP, due on the 11th, is expected to slow to 0.1% month-on-month, and the pound could react depending on the outcome. The US August CPI is expected to accelerate to 0.4% month-on-month, with core at 0.2%, and will be a key factor in the Fed's rate-cut decision at the FOMC.
ECB expected to raise policy rate by 0.25pp, boosting yields.
ECB rate hike expected to lift euro-area yields, including German bunds.
