The Week Ahead – 24th July 2023

FOCUS ON: Earnings Season and Central Bank Rate Decisions

• Big names, including Microsoft, take their turn to update investors during the US earnings season.
• US and Eurozone central banks are to update markets on interest rate policy.
• A selection of key inflation and sentiment reports will also be released.

Traders face a busy news week as the two most important central banks in the world update the markets on their interest rate policies, and the US earnings season brings big-name corporations such as Microsoft, Alphabet, and General Motors into play.

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Forex

GBPUSD

The only major sterling-specific data point this week is the PMI index number, which is due to be released on Monday. However, a whole range of significant updates in other regions can be expected to trigger price moves in GBPUSD.

Daily Price Chart – GBPUSD Chart – Daily Price Chart – Fib Level Resistance/Support

Source: IG

GBPUSD Chart – Hourly Price Chart

Source: IG

Economic data report likely to influence the value of GBP currency pairs:

• Monday 24th July – ​9:30am BST – UK PMI (July, flash). Manufacturing PMI forecast to fall to 46 and services to fall to 53.
• Tuesday 25th July – ​3:00pm BST – US consumer confidence (July). Index expected to rise to 113 from 109.7.
• Wednesday 26th July – ​7:00pm BST – FOMC interest rate decision. US interest rates expected to rise 25 basis points, to 5.5% from 5.25%. Press conference at 7:30pm will provide further guidance on Fed interest rate policy.
• Thursday 27th July –​ 1:15pm BST – ECB interest rate decision. Analysts expect rates to rise to 4.25%. Press conference at 1:45pm will provide further insight into the medium and long-term outlook.
• ​Thursday 27th July – 1:30pm BST – US GDP (Q2, advance). GDP forecast to rise 1.9% quarter-on-quarter, from 2% in Q1.
• Friday 28th July – ​1:30pm BST – US PCE price index (June). Core PCE price index expected to rise 0.2% from 0.3% in May.

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EURUSD

EURUSD traders will focus on the interest rate announcement from the ECB due on Thursday. A range of other reports due to be released throughout the week could also influence the price of euro-based currency pairs.

EURUSD Chart – Daily Price Chart

Source: IG

EURUSD Chart – Hourly Price Chart

Source: IG

Economic data report likely to influence the value of EUR currency pairs:

• Monday 24th July – ​ ​9:00am BST – Eurozone PMI (July, flash). Analysts expect manufacturing to fall to 42.8 and services to fall to 51.5.
• Tuesday 25th July – ​ ​9:00am BST – German IFO index (July). Index forecast to fall to 86.6 from 88.4.
• Tuesday 25th July – ​3:00pm BST – US consumer confidence (July). Index expected to rise to 113 from 109.7.
• Wednesday 26th July – ​7:00pm BST – FOMC interest rate decision. US interest rates expected to rise 25 basis points, to 5.5% from 5.25%. Press conference at 7:30 pm will provide further guidance on Fed interest rate policy.
• Thursday 27th July – ​1:15pm BST – ECB interest rate decision. Analysts expect rates to rise to 4.25%. Press conference at 1:45 pm will provide further insight into the medium and long-term outlook.
• ​Thursday 27th July – 1:30pm BST – US GDP (Q2, advance). GDP forecast to rise 1.9% quarter-on-quarter, from 2% in Q1.
• Friday 28th July – ​​1:00pm BST – German CPI (July, preliminary). Prices predicted to rise 6.1% year-on-year and 0.2% month-on-month, from 6.4% and 0.3%.

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Indices

S&P 500

Tuesday sees some of the biggest companies in the market update investors as part of the earnings season parade. That is followed on Tuesday by the update by the Fed on interest rate policy. Other reports will offer an insight into the health of the US economy and can be expected to trigger price moves in US stocks.

S&P 500 Chart – Daily Price Chart

Source: IG

S&P 500 – Hourly Price Chart

Source: IG

Economic data report likely to influence the value of US stocks:

• Monday 24th July –​ 2:45pm BST – US PMI (July, flash). Manufacturing PMI is expected to fall to 46 and services to weaken to 54.
• Tuesday 25th July – ​3:00pm BST – US consumer confidence (July). Index expected to rise to 113 from 109.7.
• Wednesday 26th July – ​7:00pm BST – FOMC interest rate decision. US interest rates expected to rise 25 basis points, to 5.5% from 5.25%. Press conference at 7:30 pm will provide further guidance on Fed interest rate policy.
• Thursday 27th July – ​1:15pm BST – ECB interest rate decision. Analysts expect rates to rise to 4.25%. Press conference at 1:45 pm will provide further insight into the medium and long-term outlook.
• ​Thursday 27th July – 1:30pm BST – US GDP (Q2, advance). GDP forecast to rise 1.9% quarter-on-quarter, from 2% in Q1.
• Friday 28th July – ​1:30pm BST – US PCE price index (June). Core PCE price index expected to rise 0.2% from 0.3% in May.

Companies releasing earnings reports this week:

• Tuesday 25th July – Microsoft, Alphabet, Visa, General Motors, Verizon, Snap.
• Wednesday 26th July – Coca-Cola, AT&T.
• Thursday 27th July – Intel, Ford, McDonald’s.
• Friday 28th July – Chevron, Procter & Gamble.

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