The most exciting event on the economic calendar today is the July monetary policy meeting of the European Central Bank. The ECB has to decide whether to start considering any hawkish action, but considering the fact that inflation is just meeting the forecasts without overshooting the target levels, it might still be too early for action.
Special attention should be paid to the ECB’s updated forward guidance. Even if asset purchases and interest rates remain the same, the bank’s expectations will speak volumes.
Still, if President Lagarde so much as suggests that anyone within the ECB is considering a tapering of the asset purchases program, the euro could strengthen because no hawkishness is expected right now.
The other important highlight of the day is the usual for Thursdays release of jobless claims reports in the United States. Initial claims are expected to have dropped to 350K, while continuing claims should have dropped to 3.1 million. We have come a long way since the 8 million continuing claims at the peak of the pandemic, but any unpleasant surprises on the US labor market can certainly sour the mood of investors.
Today we expect to see all major US stock indices extend their rally. Things are looking up for American businesses, which seemed to have had a good second quarter this year on optimism about the economy reopening.
So far this week the earnings from major US companies have been promising, further bolstering stock indices. Today we expect to hear from Intel about its Q2 performance. In the context of the global chip shortage, Intel’s reports will be very interesting.
Bitcoin, arguably the most volatile financial asset out there, is once again recovering some of its lost ground and is back above $31,000. The cryptocurrency is doing better after Tesla CEO Elon Musk stated that the electric vehicle maker might start accepting Bitcoin as a payment method again.
Musk previously dropped Bitcoin due to environmental concerns, but has been working with cryptocurrency farms to establish standards for using clean energy for mining.
