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      UK GDP Data and US CPI Report in Focus as Central Banks Prepare for Rate Decisions

      The European session today features the release of the UK GDP data for July, which is anticipated to show no growth at 0.0%. This figure is not expected to significantly influence the Bank of England's (BoE) policy direction, as most policymakers are maintaining a patient approach. However, market sentiment is shifting, with increased expectations for interest rate hikes following a rise in oil prices. Traders are currently pricing in two rate hikes by the end of the year, starting in November.

      In the American session, attention will turn to the US Consumer Price Index (CPI) report. The headline CPI year-over-year is projected to remain steady at 3.4%, while the month-over-month figure is expected to rise to 0.4% from 0.1%. The Core CPI, which excludes volatile food and energy prices, is forecasted to show a slight decrease year-over-year to 2.4% from 2.5%, with the month-over-month measure expected to hold at 0.2%. The Core CPI's month-over-month reading is particularly significant, as Federal Reserve officials have indicated it will influence their monetary policy decisions.

      Recent comments from Federal Reserve Governor Christopher Waller suggest that a surprise increase in the Core CPI could lead to a rate hike in September. This comes amid a backdrop of rising oil prices, with West Texas Intermediate (WTI) crude trading above $100 per barrel. This surge has prompted a reevaluation of rate hike probabilities, with traders now estimating a 65% chance of an increase at the upcoming Federal Open Market Committee (FOMC) meeting. A CPI report that aligns with expectations may not be sufficient to deter market anticipations for a rate hike, potentially compelling the Fed to act to avoid a dovish surprise.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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