Week Ahead – July 10th

Next week, the US central stage will be taken by the June Inflation report, followed by speeches from several Fed officials. Additionally, investors will closely watch the start of the Q2 earnings season, the Michigan consumer confidence index, producer prices, export and import prices. Furthermore, the Bank of Canada, Reserve Bank of New Zealand, and South Korea Central Bank will provide updates on the course of monetary policy. Moreover, June inflation figures are set to be released by China, Brazil, India, and Russia. Other important releases include China’s trade data and new yuan loans, the German ZEW Economic Sentiment Index, UK’s May GDP growth and labor data, as well as Australia’s business and consumer sentiment.

In the US, the primary focus will be on the CPI figures. The headline annual inflation is projected to decline to 3.1% in June from 4% in the previous month, while the core index may fall to 5% from 5.3%. Investors will also closely watch speeches by several Fed officials, hoping to gain insights into the future trajectory of monetary policy. Other economic indicators to keep an eye on include producer and foreign trade prices, the preliminary estimate of Michigan Consumer Sentiment, and the government’s monthly budget numbers for June. Finally, the second-quarter earnings season will start, with reports from prominent financial institutions such as Citigroup, JPMorgan Chase, and Wells Fargo, along with Delta Air Lines, PepsiCo, BlackRock, and UnitedHealth Group.

Elsewhere in America, the Bank of Canada is anticipated to implement an additional 25 basis points rate hike on Wednesday, bringing its policy rate to a 22-year high of 5%, amid policymakers’ efforts to steer inflation back towards their target. Brazil’s inflation figures, retail trade data, and business sentiment will also be in the spotlight.

In Europe, important releases include the final inflation readings for Germany, Spain and France; ZEW Economic Sentiment for Germany; industrial production and trade balance for Italy and the Euro Area; and inflation rates for Sweden and Russia. Traders will also keep a close eye on comments from ECB officials, including President Lagarde for further clues on the central bank’s next steps although markets have already priced in another increase in borrowing costs later in the month.

In China, a fresh decline in new yuan loans is expected to be the latest blow to the country’s so-far poor economic recovery. The world’s second-largest economy will also divulge its trade balance, housing prices, and the inflation rate for June. In Japan, markets await the balance of payments for May. In the meantime, a busy week of releases in India will be headlined by the inflation rate for June, expected to consolidate at the RBI’s 4% target level, followed by industrial growth and trade figures. Elsewhere, South Korea is likely to hold its key interest rate and Singapore will share its GDP growth rate for the second quarter.

In Australia, markets await a set of forward-looking indicators with July’s Westpac Consumer Confidence and June’s NAB Business Confidence. In New Zealand, the RBNZ is expected to hold its key rate at 5.5%.