Last week, investors on the financial markets were focused on events in the USA. We learned about the Fed's decision regarding interest rates and received reports from the labor market. This week, investors' attention will shift to Europe, where the Bank of England will announce its decision on interest rates. We will also see many important reports for European countries, as well as the ECB minutes. For this reason, it's worth keeping an eye on the EURUSD, GBPUSD pairs, and the DAX index.
EURUSD
On Friday, May 10, the minutes from the last ECB meeting will be published. Investors' attention will focus primarily on the potential interest rate cut at the meeting in early June. The market is currently pricing in nearly a 95% chance of a rate cut. The divergence between the ECB's and the Fed's rhetoric may sustain downward pressure on the EURUSD pair.
GBPUSD
On Thursday, we will learn the Bank of England's decision on interest rates. The markets currently price in less than a 5% chance of a rate cut this week. However, investors' attention will focus on the Bank's official stance for the coming months. The first 25 basis points cut is currently priced in for late September 2024. On this day, it's worth watching the GBPUSD pair, which is expected to show heightened volatility.
DAX
This week's calendar also includes many publications for Eurozone countries. We will see final PMI data for the services sector and retail sales. The calendar also contains important publications for Germany, including reports on industrial production, factory orders, and import and export data. New data will help investors assess the current state of the Eurozone and whether improvement is on the horizon. Better reports may support European indices, especially the German DAX.
