European session

The European session has little on the agenda, with only a few low-tier releases due, including the Swiss economic sentiment index and the UK CBI distributive trades survey. Neither release is expected to affect policy views at the respective central banks, so market reaction is likely to remain limited.

Markets are instead focused on developments involving the US and Iran, after expectations for a deal strengthened yesterday on the back of several positive reports. With few domestic catalysts in Europe, that backdrop is likely to stay one of the main drivers of price action ahead of the Jackson Hole event.

American session

The US session brings the PCE price index and the second estimate of US Q2 GDP. The PCE report often draws attention, although it is rarely a major market mover because it can be estimated fairly accurately from earlier CPI and PPI data.

Core PCE is expected to rise 3.3% year over year, unchanged from the previous reading, while the month-over-month measure is seen at 0.2%, up from 0.1% previously. The GDP revision will also be watched for any meaningful change in the tone of growth data, but in the current setup, the inflation print is likely to matter more for near-term rate expectations.

Markets are currently pricing in a 60% chance of no change in interest rates at the September FOMC meeting. That pricing is likely to be influenced by possible US-Iran deal developments, the Jackson Hole event, and the next CPI report, as traders look for fresh evidence on whether recent data are enough to keep policy on hold.

Central bank speakers

• 10:10 GMT/06:10 ET - ECB's Cipollone (neutral - voter)
• 15:45 GMT/11:45 ET - Fed's Barkin (neutral - non voter)
• 16:15 GMT/12:15 ET - SNB's Martin (neutral - voter)