Market movers ahead

  • In the US core CPI is important, as it shows whether the Fed has wiggle room to conduct a more expansionary monetary policy in the months to come.

  • The ECB?s buying of peripherals bonds is likely to continue next week, in our view.

  • In the euro area Q2 GDP is expected to grow 0.4% q/q.

  • Japanese Q2 GDP numbers are likely to be weak due to the March quake.

Global update

  • High volatility in global stock markets.

  • The Fed announced it is likely to keep interest rates low until mid-2013.

  • The ECB has revived the buying of peripherals bonds pushing Italian and Spanish yield close to 5%..

  • Chinese CPI probably peaked in July.

Focus

  • We look at different scenarios for US government debt based on different assumptions for GDP growth, interest rates and budget cuts: Research: Further downgrade of US debt likely in 2012