Weekly Outlook, 25-29 July.

FOMC, Monkeypox, & Earnings!

While the World Health Organization declared the monkeypox outbreak a global health emergency, this week's focus will be on the FOMC meeting with a 75 bps rate hake expectation. However, huge economic data, including German IFO, US Consumer Confidence, Durable Goods, GDP and PCE, and Inflation out of Australia and Canadian GDP, in line with too many earnings reports, can create a volatile week. Let us review the essential data in the week ahead with me, Ahura, and IFC Markets.

US CB Consumer Confidence & New Home Sales

On Tuesday, while FOMC's two days meeting will start, market participants are waiting to see the Consumer confidence is expected to fall to a 17-month low of 96.0 from 98.7 in June and a -3.7% drop in New Home Sales. Higher inflation and surging mortgage rates are the main factors of this common weakness. Since the focus will be on the FCOM meeting, these data before meeting results should not affect the market much.

US Durable Goods Orders – Wednesday

We should pay more attention to the order backlog data in next week's release t see if there are any signs of increased cancellations. So far, we can see that FED expectations for less demand with higher inflation are fulfilling. In line with less demand for goods, business spending and personal consumption also are decreasing. Publishing these data on the same day as the FED statement and press conference will marginalize its importance.

FOMC Rate Decision and Monetary Policy Statement

With a 50 bps rate hike by ECB and considering June CPI data, we believe the FOMC may, like at its June meeting, hike more than initial estimates again. For now, a 50 or 75 basis point increase seems most likely at our next meeting. There are some guesses about a 100 bps rate hike as well, which seems unlikely as economic growth has already decreased. We can see economic slowdown signs in the data released this week. For market reaction, we have to wait to see the statement and Mr. Powell's press conference.

Tokyo Inflation

Dislike other economies; the Japanese were trying to increase inflation to drive their economy and encourage the people to invest and buy goods. This week's CPI inflation in Japan will show how successful BoJ's policies were. In June, Tokyo's CPI hit 2.3% on the annual scale, which was last seen in early 2015. For July, we expect to see the inflation increase a little bit more. Despite higher inflation and a weaker yen, the BoJ is unlikely to change the course of the policy, which means that the yen can continue to face depreciation pressure going forward.

Earnings report

It will be a super busy week for earning. Microsoft, Alphabet, Visa, Louis Vuitton, Coca-Cola, 3M, & McDonald's are due to release their report on Tuesday. Meta Platforms, Qualcomm, T-Mobile US, Boeing, CME group, Shopify Inc, and Teva, will have an earnings call on Wednesday. Apple, Amazon, Mastercard, Nestle, Pfizer, Shell, Intel, and Volkswagen, on Thursday, and finally, Exxon Mobil, and Chevron's earnings reports on Friday, must be watched closely.