The coming week brings a heavy global macro calendar, led by the FOMC, BoE and BoJ policy decisions, US PCE inflation, US advance Q2 GDP and Eurozone CPI.

A common thread across the releases is whether central banks can keep policy on hold while energy prices and tariff risks complicate the inflation outlook. Several of the week’s data points also arrive before September policy meetings, making the balance between growth momentum and renewed price pressure especially relevant.

Monday: BoC Market Participants Survey for July, Eurogroup Economic and Financial Affairs Council budget discussions, Chinese industrial profits for June, German Ifo expectations for July and US durable goods for June.

Tuesday: French consumer confidence for July, Spanish retail sales for June, weekly US ADP employment change, advance US goods trade balance for June, Richmond Fed manufacturing for July and Dallas Fed services for July.

Wednesday: Fed policy announcement for July, BoC minutes for July, Australian CPI for June, Swedish GDP for June and Italian industrial sales for May.

Thursday: BoE policy announcement and MPR for July, CBRT minutes for July, Australian export and import prices for Q2, French and Spanish GDP for Q2, Spanish and German HICP for July, Eurozone GDP for Q2, Eurozone unemployment for June, US PCE for June, US advance Q2 GDP and US jobless claims.

Friday: BoJ policy announcement for July, Japanese unemployment for June, Tokyo CPI for July, Japanese retail sales for June, Australian PPI for Q2, Chinese NBS PMIs for July, German import prices for June, Swiss retail sales for June, French HICP and PPI for July and June respectively, German unemployment for July, Eurozone CPI for July, Italian HICP for July, Canadian GDP for May, US employment cost index for Q2 and the final University of Michigan survey for July.

Week Ahead

China Politburo Meeting (TBC)

China’s mid-year Politburo meeting is expected next week, consistent with its usual late-July timing, although the exact date is not announced in advance. The meeting will review first-half economic performance and is expected to set policy direction for the rest of the year. Attention will be on whether Beijing signals additional fiscal support after a moderation in growth, and on how policymakers balance support for domestic demand with the continued focus on advanced manufacturing and high-tech industries. References to the property sector, consumption and financial stability will also be watched after the PBoC delivered its largest Medium-term Lending Facility liquidity injection in five months.

Fed Policy Announcement (Wednesday)

The Fed is expected to keep rates unchanged at 3.50-3.75%, while markets assign a 30-35% probability to a hike. A softer-than-expected June CPI report, weaker nonfarm payrolls and a BEA methodology change that analysts estimate will mechanically lower core inflation by about 0.2ppts from September give the Committee scope to wait. That would allow officials to assess developments in the Middle East conflict, particularly after the recent US-Iran escalation lifted energy prices again.

Policymakers have warned against reacting too quickly to a shock that may prove temporary, but the Committee is unlikely to appear relaxed. Underlying inflation remains well above target and pressures extend beyond energy. Higher memory chip costs are beginning to feed into consumer goods, while tariffs could return to focus when current Section 122 universal measures expire this week. For new Chair Kevin Warsh, the likely outcome may be a hawkish hold. In the June projections, nine of 18 participants submitting forecasts expected at least one rate rise this year. Since then, Governors Waller and Cook have said they would consider tightening if disinflation stalls, while Fed Presidents Logan, Hammack and Kashkari have also appeared open to moving sooner. That creates scope for 2-4 dissents.

Warsh has already shortened the Fed’s policy statement, so small wording changes will be closely examined. At the press conference, he is likely to face questions on the inflation impact of the Middle East conflict, newly announced task forces and whether recent data could bring forward action. Given Warsh’s aversion to forward guidance, he is unlikely to provide a clear signal and is expected to stress that all options remain open and decisions will depend on data.

BoC Minutes (Wednesday)

The BoC minutes from the July meeting, when the governing council kept rates unchanged at 2.25% as expected, are not expected to differ materially from the statement because of high uncertainty around the Middle East. Policymakers are likely to reiterate a nimble approach, noting conditions could change quickly and that additional policy action may be needed if inflation remains persistent. After the strong rebound in crude prices, members may be less willing to look through the initial inflationary effect of higher oil prices amid concern that broader price pressures are more likely.

Australian CPI (Wednesday)

Consensus expects headline CPI to rise 0.7% Q/Q in Q2, down from 1.4%, lowering annual inflation to 4.0% Y/Y. Trimmed mean CPI, the RBA’s preferred core measure, is expected to rise 0.9% Q/Q after 0.8%, lifting the annual rate to 3.7% from 3.5%. Westpac expects June monthly CPI and trimmed mean inflation to rise 0.4% M/M, putting the annual rates at 4.2% and 3.7%, respectively. Westpac said the temporary halving of the fuel excise should weigh on headline inflation in the quarter, while softer-than-expected holiday travel prices should offset some upside risks. It added that Middle East conflict spillovers were starting to appear in new dwelling purchase costs, repairs and maintenance, meals out and takeaway.

BoE Policy Announcement (Thursday)

The “on hold for the foreseeable future” narrative remains in place, although a relatively robust economy and inflation still sticky above target mean a hike cannot be ruled out, especially with energy prices rising. Uncertainty around the Middle East, US tariffs, domestic politics and relative policy space keeps a hold as the base case, consistent with the trade-off Governor Bailey described in June. The vote split may be more hawkish than the previous 7-2, with Mann the most likely additional member to vote for a hike. The updated MPR will be reviewed for hawkish signals after the re-acceleration in energy prices. Markets price two 25bps hikes this year, in November and December, while the implied probability of a July hike is currently below 20%.

Eurozone GDP (Thursday)

The first Q2 release is expected, based on PMIs, to show a “largely stagnant” quarter. The ECB’s June forecast pointed to 2026 growth of 0.8% under baseline and milder scenarios, falling to 0.7% and 0.5% under adverse and severe scenarios. On energy alone, Q2 was less affected than the baseline and milder projections assumed, with Brent averaging around USD 97/bbl versus assumptions of USD 112/bbl and USD 88/bbl, respectively. That could be reflected in better-than-expected growth, although any strength may be temporary given the recent energy rebound on renewed Middle East activity. The fast-moving geopolitical and energy backdrop also means the Q2 reading may already be somewhat stale.

US PCE (Thursday)

With June CPI and PPI available, analysts expect core PCE, the Fed’s preferred inflation gauge, to rise 0.17-0.19% M/M, leaving the annual rate at 3.3% Y/Y, down one-tenth. Headline PCE is expected to slow to 3.7% Y/Y from 4.1%, the first easing since the start of the US-Iran conflict. Core CPI was broadly flat in June, while lower energy prices reduced headline inflation. The energy drag should be less pronounced in PCE than in CPI or PPI because energy has a smaller PCE basket weight, but declines in motor fuel and fuel oil should still lower the headline reading. Core PCE may run hotter than core CPI because software prices carry a larger PCE weight and portfolio management fees may add upward pressure. Cheaper apparel, softer rents and fading World Cup-related hotel effects should partly offset those pressures.

US GDP Advance (Thursday)

The Atlanta Fed GDPNow tracker currently models Q2 growth at 1.7%, indicating expansion but a clear deceleration from Q1’s 2.1% pace. Net trade is expected to be a headwind after the goods deficit widened sharply in May. Oxford Economics analysts say trade will subtract more than 2ppts from headline growth, driven by surging capital goods imports linked to AI infrastructure spending and weaker industrial supplies exports. Solid business investment and inventory accumulation should provide offsets. May durable goods data also suggest support from defence spending, with defence capital goods shipments rising sharply Y/Y. As the advance estimate is the first official read on the quarter and is subject to later revisions, details on final sales, inventories and trade will matter alongside the headline rate.

BoJ Policy Announcement (Friday)

The Bank of Japan is widely expected to keep rates unchanged next week, with money markets pricing roughly a 96% probability that rates remain at 1.00%. The BoJ will also release its latest Outlook Report, including board members’ median forecasts for Real GDP and Core CPI. At its June 15-16 meeting, the BoJ raised the policy rate by 25bps to 1.00%, as expected, the highest level in 31 years. The decision passed 7-1, with board member Asada dissenting. The central bank also paused its tapering of monthly bond purchases, to be kept around JPY 2tln from April 2027, while leaving the existing JGB tapering plan unchanged through Q1 2027. Board member Tamura dissented on bond buying by proposing continued reductions of JPY 200bln per quarter beyond April 2027, but the proposal was rejected by majority vote.

The BoJ retained a tightening bias, signalling scope for more rate hikes depending on economic, inflation and financial conditions, while preserving the option to adjust bond-buying plans. Deputy Governor Uchida, standing in for hospitalised Governor Ueda, said the economy was recovering moderately, financial conditions were accommodative, underlying inflation risked deviating upward above the price target and economic risks had eased since April. Given the recent hike, another immediate move is considered very unlikely. A previous Bloomberg source report said the BoJ sees little need for consecutive hikes but may raise this year’s growth forecast from 0.5% and revise its downside-risk assessment as AI-related demand supports exports, profits and incomes, while faster cost pass-through keeps underlying inflation risks elevated above the 2% target. A more recent source report said the BoJ was widely expected to hold in July and was nearing a point where inflation expectations were becoming anchored. Officials were also said to be open to raising rates more often than every six months.

Japan Tokyo CPI (Friday)

Tokyo CPI, a leading indicator for national inflation, is expected to accelerate in July. Headline CPI is forecast at 2.0% Y/Y from 1.7%, core CPI excluding fresh food at 1.8% from 1.6%, and core-core CPI excluding fresh food and energy at 2.0% from 1.9%. The data arrive just hours before the BoJ decision, where the central bank is widely expected to keep rates at 1.0% after June’s increase.

Chinese NBS PMI (Friday)

China will release official July PMI data Friday. Markets expect manufacturing PMI to remain at 50.3 and non-manufacturing PMI to edge down to 50.2 from 50.3. ING forecasts a slightly weaker outcome, with manufacturing PMI at 50.1 and non-manufacturing PMI at 50.0. ING said manufacturing activity should remain broadly resilient despite modest cooling, after June industrial data beat expectations and industrial profits continued to recover, supported by hi-tech and export-facing sectors. PMI readings above 50 indicate expansion, so the expected levels would point to only modest growth in activity rather than a strong acceleration.

Eurozone CPI (Friday)

Eurozone CPI will be examined for signs that July’s energy rebound, especially in the second half of the month, is already appearing in the data, with attention on whether ex-energy components are affected. Final PMIs indicated cooling cost pressures, but the survey window to July 22 missed a further USD 6-10/bbl rise in Brent, making that cooling potentially premature. The data will feed the debate over September after ECB President Lagarde kept the door open to a September move at the July meeting without explicitly signalling a hike, maintaining a data-dependent stance. The ECB targets 2% inflation over the medium term, so the composition of the CPI print will matter as much as the headline figure. The recent energy resurgence may not yet show in this series, so the next data set before the September meeting is likely to receive greater attention. Post-meeting sources indicated the direction of travel is already toward a September move.

This article originally appeared on Newsquawk.

Week in Review

Chinese LPR (Monday)

The PBoC kept benchmark Loan Prime Rates unchanged for the 14th consecutive month, with the 1yr LPR at 3.00% and the 5yr LPR at 3.5%. The outcome was expected, as the central bank is viewed as preferring adjustments through daily liquidity operations and recently debuted overnight reverse repo operations to improve interest-rate transmission. Chinese data have been mixed, supporting a wait-and-see stance. Q2 GDP growth slowed to 4.3% Y/Y, below expectations of 4.4% and the previous 5.0%, and below China’s official 4.5%-5.0% growth target for 2026. However, June industrial production and retail sales beat forecasts, and trade data exceeded estimates across all components.

New Zealand Inflation (Monday)

New Zealand annual inflation accelerated to 4.1% Y/Y in Q2 from 3.1%, above market consensus of 4.0% and the RBNZ’s 3.9% forecast, reaching the highest level in about two-and-a-half years. The upside surprise was mainly driven by fuel prices after the Middle East conflict, with petrol up 27.5% and diesel up 71.1% over the year. Electricity prices rose 12.0%, council rates climbed 8.8% and new housing construction costs rose 2.7%. Statistics New Zealand said more than 80% of CPI basket items recorded annual price increases. The data reinforced expectations that the RBNZ will continue tightening after delivering its first OCR increase in three years earlier this month.

Canadian CPI (Monday)

Canadian inflation was broadly softer than expected in June. Lower gasoline prices helped headline CPI slow to 2.8% Y/Y, compared with expectations of 2.9% and a prior 3.2%, while M/M CPI fell 0.4% versus expectations of -0.2% and a previous 1.0%. Median CPI eased to 1.9% from 2.1%, trimmed CPI slowed to 1.8% from 2.0%, and common CPI was stickier than expected at 2.6% versus 2.5% expected and 2.7% prior. The BoC’s preferred core measures averaged 2.1%, down from 2.27%. Oxford Economics said the “lagged impact of higher oil and fertiliser prices will likely push food inflation to the mid-4% range by the end of 2026”.

UK Jobs and Inflation

The UK unemployment rate held at 4.9%, in line with or slightly below some expectations of 5%, while employment rose 147k versus expectations of 85k. The ONS said “some measures continue to suggest softening”. Wage growth excluding bonuses held at 3.4%, while earnings including bonuses slowed to 4.3% from 4.4%. The ONS also said “public sector wage growth remains elevated, affected by the timing of recent NHS pay awards”.

UK headline CPI cooled more than expected in June to 2.6%, below expectations of 2.7%, the prior 2.8% and the BoE’s June view of 3.1%. PPI input fell 2% M/M and services inflation cooled, but core CPI held at 2.6% versus expectations of 2.5%. Food inflation slowed to its lowest level since August 2024, 1.1ppts below the BoE forecast. ING said the report weakened the case for rate hikes this year and expects rates on hold through 2026, while money markets fully price a 25bps hike by November.

Other Key Reviews

Australia’s labour market strengthened in June, with employment up 76.3k versus a 15.0k consensus forecast and unemployment steady at 4.4%. The Australian Bureau of Statistics said the gain included 29.3k full-time and 47.0k part-time jobs, while participation rose to 67.0% from 66.7%.

The ECB held rates as expected at its non-forecast meeting, retained data-dependent and meeting-by-meeting language and provided no forward guidance or pre-commitment. President Lagarde said the ECB was giving a “framework”. The decision was unanimous, although some members questioned whether a hike should have occurred. Post-meeting sources said a September hike will be considered, and markets currently price more than a 70% chance of a move.

The CBRT kept its key policy rate at 37.0%, with the interest-rate corridor unchanged at 450bps and bands at 40% and 35.5%. Most banks still forecast year-end inflation above the CBRT’s 26% target, including GS and MUFG at 30% and Oxford Economics at 29%. Oxford Economics expects easing to resume in Q4, taking the rate to 35% by year-end, while BBVA expects cuts from September and a year-end rate of 36%.

South Africa’s central bank unexpectedly cut rates by 25bps to 7.00% in a 4-2 vote, saying policy was restrictive enough to return inflation to target within two years. The SARB said underlying inflation measures pointed to stronger price pressures and upside risks, and introduced an adverse scenario in which oil averages USD 100/bbl in 2026, inflation remains above target and another hike is required this year.

UK flash PMIs beat expectations, with manufacturing at 52.8, services at 51.8 and composite at 52.1. Eurozone flash PMIs also topped forecasts, with manufacturing at 52.0, services at 51.6 and composite at 51.9. Both S&P Global surveys ran from July 9-22 and did not capture the latest Middle East escalation that pushed Brent above USD 100/bbl.

UK retail sales rose 1.0% M/M in June versus 0.2% expected, while ex-fuel sales increased 1.1% versus -0.4% expected. Annual sales growth rose to 4.2% from 3.2%. Pantheon Macroeconomics still expects consumer spending growth to ease to 0.1% Q/Q across H2.

Japanese inflation was broadly in line with expectations in June. Headline CPI rose 1.7% Y/Y, core CPI rose 1.6%, and core-core CPI excluding fresh food and energy eased to 1.7% versus expectations of 2.0% and a prior 1.8%. The data support expectations that the BoJ will keep policy unchanged in July while assessing whether stronger wages can generate more durable inflation.