Euro area Q2 GDP and July consumer inflation on the agenda

Major currencies are mostly little changed to start the new day as the market stuck with the post-Fed narrative in trading yesterday. With month-end being a factor to consider today, we might not get much poise for market participants to really move the needle.

As such, the post-Fed tones may yet continue for the time being.

The greenback is experiencing its worst week since May and it has been a rough week overall but amid a retreat in risk sentiment on the day, the dollar may find a bit more of a footing going into the weekend.

Tech stocks in particular are not faring well after Amazon warned that its stellar growth during the pandemic is starting to wane. Nasdaq futures are down over 1% with S&P 500 futures down 0.7% as we look towards European trading.

Dow futures are also down 0.3%, so there is a broader retreat in risk so far today.

The resumption of the sharp fall in Hong Kong and Chinese stocks today also isn't helping with the mood, as the latter is down by another 2% currently.

Looking ahead, there will be a slew of euro area data for the market to digest but they should all mostly reaffirm what we already know about economic conditions in the region.

0530 GMT - France Q2 preliminary GDP figures

Prior release can be found here. The overall tone today is that we should see euro area economies bounce back to growth in Q2 after a more subdued first three months to the new year. Given the start of looser restrictions, that should see a modest expansion overall across the region in Q2.

0645 GMT - France July preliminary CPI figures

Prior release can be found here. We may not see the kind of increase in French inflation as we did with German inflation yesterday, but overall price pressures should keep thereabouts in July and should stay that way in the months ahead.

0700 GMT - Switzerland July KOF leading indicator index

Prior release can be found here. The reading measures the future trends of overall economic activity in the Swiss economy.

0700 GMT - Spain Q2 preliminary GDP figures

Prior release can be found here. The Spanish economy is estimated to grow by a little over 2% q/q in Q2, reaffirming a bounce back after a sluggish Q1.

0800 GMT - Germany Q2 preliminary GDP figures

Prior release can be found here. The German economy is estimated to be one of the better performers in Q2, pinned for a rebound of 2.0% q/q, as looser restrictions help to spur economic activity in the euro area.

0800 GMT - Italy Q2 preliminary GDP figures

Prior release can be found here. Italy's economy should see a modest growth over 1% q/q as overall conditions pick up amid looser restrictions in Q2.

0900 GMT - Eurozone Q2 preliminary GDP figures

Prior release can be found here. Put everything together, the euro area economy is estimated to grow by roughly 1.5% q/q - which points to a modest rebound in overall conditions after Q1. The hope is that the summer optimism can keep up throughout Q3 but supply chain disruptions and higher cost prices may weigh in the months ahead.

0900 GMT - Eurozone July preliminary CPI figures

Prior release can be found here. Headline annual inflation is estimated to hit move back up to hit the ECB's target of 2.0% y/y but it is unlikely to really get policymakers off their seats. The narrative remains that the ECB will brush off any increase in price pressures and with core inflation still to keep thereabouts below 1.0% y/y, it's a tall order to really suggest that there is a material and sustainable increase in consumer inflation.

That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.