Trading Week Ahead: Central Banks & CPI in the Spotlight

Markets face a pivotal week as central bank decisions and inflation data collide. The Fed is widely expected to deliver a second rate cut, but it’s Powell’s forward guidance that will dictate the broader market tone. Across the Atlantic, the ECB holds steady, yet any dovish shift from Lagarde could rattle the euro. Meanwhile, Friday’s Eurozone CPI will serve as a critical gauge for future policy moves, with volatility likely to surge across all markets.

• Fed Rate Decision
The Fed is widely expected to cut rates from 4.25% to 4.00% this Wednesday, marking its second straight easing move. However, the key market driver will be the forward guidance accompanying the decision. If Chair Powell signals openness to further cuts amid weakening macro data, the USD could face renewed pressure, yields may fall, and equities could find support. Conversely, a more cautious or hawkish tone could stabilise the greenback and spark profit-taking across risk assets.

• ECB Rate Decision
The ECB is set to hold rates steady at 2.15%, but traders will be laser-focused on the language and tone of the Monetary Policy Statement. Should President Lagarde adopt a dovish stance, indicating possible future cuts amid stagnating growth and soft inflation, EUR pairs may slide. Alternatively, a more hawkish or data-dependent message could support the euro and temper rate cut bets.

• Eurozone CPI
Friday’s Eurozone CPI release will test whether inflation is easing in line with ECB projections. A stronger-than-expected print may delay any hopes for monetary easing, potentially lifting EUR and pushing bond yields higher. A soft inflation figure, however, would likely intensify rate cut expectations and weaken the euro, creating space for upside in European equities and bonds.

*All times in the table are in GMT+2
*US government data may be impacted by the shutdown. (Tentative) events are subject to delay, revision, or cancellation.

---

All information provided on this site is intended solely for educational purposes related to trading on financial markets and does not serve in any way as a specific investment recommendation, business recommendation, investment opportunity analysis or similar general recommendation regarding the trading of investment instruments. FTMO only provides services of simulated trading and educational tools for traders. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local laws or regulations. FTMO companies do not act as a broker and do not accept any deposits. The offered technical solution for the FTMO platforms and data feed is powered by liquidity providers.