US macro news to dominate the calendar next week - ING

By FXstreet.com | Updated July 25, 2014 AAA

FXStreet (Łódź) - The ING team of analysts suggest that the macro news and data coming from the US: 2Q14 GDP, the July Labour and ISM reports and the Fed monetary policy decision will be in the focus of attention next week.

Key quotes

“After a really poor weather impacted first quarter, the US economy has launched a strong fight-back in 2Q14. We expect for the economy to have grown by close to 5% in the quarter with net trade and inventory rebuilding being key to this story.”

“The outlook for 3Q14 is also very positive with the ISM report likely to show an improvement based on regional surveys already released. This index is already at levels historically consistent with GDP growth in excess of 3% so it should support the view that the US economy is gaining real momentum.”

“This should be confirmed by another firm jobs figure. We look for non-farm payrolls to have risen by 250,000 on the month with the unemployment rate possibly dropping to 5.9%, which would be the lowest rate in six years.”

“This would offer further evidence that labour market slack is decreasing rapidly, and will be cited by the Federal Reserve as a key factor as to why they will taper their asset purchases by a further US$10bn per month after this coming week’s FOMC meeting.”

“Given the positive activity story in the US and signals that inflation pressures are creeping higher we suspect that the Fed will cease asset purchases after the October FOMC and that they could start to tighten monetary policy from April 2015.”

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