MNI Global Week Ahead July 27 – 31

Key Things to Watch For:

• Wednesday, July 29 – FOMC Policy Decision
  
  
  • No major policy announcements are expected at the July FOMC meeting as the committee gathers for another working session to finalize its policy framework review and lay groundwork for outcome-based forward guidance.
    
  • The Fed is likely to switch to targeting average inflation in September, in a much-anticipated move, but former policymakers told MNI it will opt not to reveal how long it would allow prices to increase at faster than its 2% target to maximize flexibility.
    
  • As the economic outlook darkens and caseloads climb, former top officials also said the Fed's plan to set conditions on its forward guidance may be pushed back to later in the year.
    

• Thursday, July 30 – U.S. Q2 GDP (Advance Estimate)
  
  
  • Thursday's advance estimate of U.S. Q2 GDP will unearth the depth of the Covid-19 recession, with markets expecting a record-shattering 34% annualized drop after a 5% decline in Q1 that was the largest fall since 2008.
    
  • Consumption fell sharply in the second quarter as businesses nationwide remained closed and state-mandated lockdowns persisted, restricting travel in some cases into mid-June.
    
  • Momentum from state reopenings beginning in April wasn't nearly strong enough to bring about a rebound in activity in Q2, and consumer sentiment stumbled in June as surging new Covid-19 cases resurfaced concerns about leaving the home.
    

• Friday, July 31 – Eurozone Q2 GDP (Advance Estimate)
  
  
• Friday sees the publication of the eurozone Q2 advance flash GDP report, giving the first official reading on just how deep the contraction was in the first three months of the pandemic fall out.
  
• Expectations are for a q/q decline of 11.5%, with Q2 GDP seen down 14% year-on-year (Q1 -3.6% q/q and 3.1% y/y), perhaps slightly better than some of the worst-case scenario's envisaged back in April.