The week at a glance

The week begins on a quiet note, with no major economic events scheduled for the FX market on Monday. On Tuesday, Japan will release the BoJ core CPI y/y, the nationwide measure excluding fresh food that the Bank of Japan tracks against its 2% price-stability target, while the United States publishes the CB consumer confidence, compiled by the Conference Board, and new home sales data.

Wednesday brings Australia's CPI data, and in the U.S. the focus will shift to the core PCE price index m/m, preliminary GDP q/q and durable goods orders m/m. U.S. data releases continue on Thursday with unemployment claims, and the day will also mark the start of the Jackson Hole Economic Policy Symposium, the annual retreat hosted by the Federal Reserve Bank of Kansas City.

On Friday, Japan will release the Tokyo core CPI y/y, typically a first look at nationwide price trends ahead of the national figures, while Canada will publish GDP m/m. Attention will then turn to Fed Chair Kevin Warsh, who is scheduled to speak at Jackson Hole. Another important release to consider will be the preliminary benchmark payroll revision for U.S. nonfarm payrolls.

Australia: July CPI expected to rebound on the month

The consensus for Australia's CPI m/m print is 0.9%, compared with the prior -0.1%. CPI y/y is expected at 3.3%, down from 3.8%, while the trimmed mean CPI m/m is forecast at 0.3%. At the projected pace, the annual rate would still sit above the RBA's 2-3% inflation target.

Last month's CPI data came in better than expected, dropping for the second month in a row. The trimmed mean, the RBA's preferred gauge of underlying inflation because it strips out volatile price moves, also improved on a monthly basis, although the annual rate edged higher to 3.6%.

For July, a rebound in monthly inflation is expected, while the annual rate is forecast to decline. Westpac analysts argue that holiday-related travel, higher fuel prices and stronger domestic services costs following the minimum wage increase are likely to drive the monthly rise, which will be partly offset by lower electricity prices.

Inflation remains a concern, with signs of renewed increases in both input costs and selling prices. The RBA gained some breathing room following the June print, but inflation expectations have since picked up, keeping the possibility of a rate hike at the September meeting open, especially if domestic demand proves resilient.

United States: core PCE, income and spending

The consensus for the core PCE price index m/m is 0.2%, compared with the prior 0.1%. Personal income m/m is expected at 0.2% versus 0.2% previously, while personal spending m/m is forecast at 0.1% compared to 0.3%. The core PCE reading, published by the Bureau of Economic Analysis as part of the income and outlays report, excludes food and energy and serves as the Federal Reserve's preferred inflation gauge.

Consumer spending appears to have remained resilient in July. While headline retail sales were soft, much of the weakness came from lower gasoline prices and a sharp decline in online sales, likely linked to Amazon Prime Day being moved to June. Excluding these effects, the underlying demand for goods remained positive and above the average pace of the past six months, Wells Fargo analysts said.

The boost from larger tax refunds is now fading, so household spending will increasingly depend on income growth in the months to come. Nominal personal income is expected to increase by 0.3% in July, while real disposable income should continue to improve gradually if labor market conditions remain stable.

Inflation is also expected to remain relatively stable. Wells Fargo forecasts headline PCE to rise by 0.1% m/m, bringing the annual rate down to 3.6%, while core PCE is expected to increase by 0.2% m/m and remain at 3.3% y/y, still above the Fed's 2% inflation goal. Recent CPI and PPI data continue to point to a gradual moderation in underlying inflation pressures.

Canada: GDP m/m and the Q2 rebound

The consensus for Canada's GDP m/m is 0.2%, compared with the prior 0.3%. The country's economy is expected to have rebounded strongly in Q2, with quarterly growth tracking above a 3% annualized pace. The monthly release from Statistics Canada will provide the June reading that completes the second-quarter picture.

The improvement appears broad-based, supported by stronger trade, consumer spending, business investment and housing activity. Some of that strength reflects a recovery from earlier disruptions, particularly in the auto sector, and is unlikely to be sustained. Growth is therefore expected to moderate in Q3, although early indicators remain supportive and the outlook for the rest of 2026 is still positive despite ongoing trade uncertainty.

Jackson Hole: Warsh speech and payroll benchmark revision

Attention on Friday will turn to the Jackson Hole Symposium, where Fed Chair Kevin Warsh is scheduled to speak, although those hoping for a clear policy signal may come away disappointed. The Kansas City Fed's mountain retreat has a history of consequential speeches - Ben Bernanke used his 2010 address to lay the groundwork for a second round of quantitative easing - which is why even thematically focused remarks draw wide attention.

Warsh is unlikely to provide detailed guidance on how the Fed would respond to incoming data in the near term, given the divided FOMC and the fact that another round of inflation and employment data is still due before the September meeting. Instead, the speech could focus more on broader questions around the Fed's policy framework, balance sheet and communications strategy.

Recent softer labor market data, cooler inflation, and weaker retail sales and consumer confidence figures have also reduced the urgency around the next policy move.

Traders will also be watching the preliminary payroll benchmark revision, with the 2026 adjustment expected to be far smaller than last year's 911K downward revision. Current estimates point to a reduction of around 100K jobs, although there is also a possibility that the March 2026 payroll level could be revised higher, according to Wells Fargo. The benchmark process reconciles the payroll estimates from the BLS establishment survey with comprehensive unemployment-insurance records, the administrative data that underpin the QCEW.

The Quarterly Census of Employment and Wages (QCEW) employment data, which are more accurate but slower to produce than Bureau of Labor Statistics (BLS) survey figures, have tracked the published nonfarm payroll figures relatively closely through late 2025, helped by improvements in BLS methodology. However, weak survey response rates and the general tendency for preliminary Q1 QCEW estimates to be revised higher remain potential sources of uncertainty.