Take Five: School's (not) out for summer
LONDON (Reuters) — The peak holiday season is gearing up, but school's not quite out for summer in financial markets.
With the U.S. Federal Reserve, European Central Bank and Bank of Japan meeting, the first snapshot of July business activity, earnings and a Spanish election on the calendar, there's lots going on.
Here's a look at the week ahead in markets from Ira Iosebashvili in New York, Kevin Buckland in Tokyo, Naomi Rovnick, Alun John and Dhara Ranasinghe in London.
1/ WAIT NO MORE
And just like that, the next Federal Reserve meeting is right around the corner. U.S. inflation is cooling but markets expect one more rate hike on July 26.
The more interesting question is whether Chair Jerome Powell will signal the Fed is more confident inflation can cool further while growth stays resilient, meaning the most aggressive rate hiking cycle in decades is nearing an end.
Signs that the Fed is unlikely to raise rates much further would, in theory, keep the wind in the sails of a buoyant Wall Street, while the dollar's tumble will likely continue.
Also in focus are earnings from some of the massive tech and growth stocks that have led markets higher this year. Among them are Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL), which report on July 25.
2/ SUMMER READING
Before they go on their summer break, ECB policymakers have a well-flagged rate hike to deliver. That will come on Thursday, with the key deposit rate tipped to rise a quarter point to 3.75%.
ECB chief Christine Lagarde will no doubt be pressed for clarity on what happens in September, and economists are divided over whether there will be another rate increase or pause.
Note, hawk Klaas Knot says any move beyond July is «by no means a certainty».
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