Week Ahead: Key Events

Monday: BoJ Summary of Opinions

Tuesday: RBA Announcement

Wednesday: German Final Inflation (Jul), IEA OMR, OPEC MOMR, US CPI (Jul)

Thursday: Norges Bank Announcement, UK GDP (Q2), US PPI (Jul)

Friday: EZ Employment (Q2) and GDP 2nd Estimate (Q2), US Retail Sales (Jul), US University of Michigan Prelim (Aug)

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BoJ Summary of Opinions (Monday)

The Bank of Japan will release the Summary of Opinions from its July 31st meeting, at which the central bank held rates at 1.00% — as widely expected — following a rate increase at its previous June gathering. The decision passed by an 8-1 vote, with board member Takata dissenting in favour of a 25bps hike. The Summary comes at a time when the BoJ is charting a normalisation course that stands apart from most major central banks, which are either holding steady or moving toward easing.

Market participants will scrutinise the degree of support for near-term tightening among other board members and whether Takata's dissent reflected an isolated view or a broader appetite for earlier rate increases. The Summary will also be examined for perspectives on the inflation outlook and the conditions required for additional tightening, particularly given the BoJ's stated intention to continue raising rates in response to economic, price, and financial developments while assessing risks to its baseline scenario.

Particular attention will focus on any discussion of upside inflation risks. Governor Ueda previously indicated that the next meeting would account for the risk of inflation overshooting to a greater degree than in the past and stressed that the BoJ need not wait for data confirming inflation has fully stabilised at 2% before adjusting policy. Participants will also look for commentary on risks tied to Middle East developments and their potential effect on prices and the broader economy.

As context, the BoJ's updated Outlook Report modestly raised real GDP forecasts for FY26 and FY27, while lowering its core CPI estimate for FY26 and raising it for FY27. Underlying inflation is still projected to reach a level consistent with the 2% target between the second half of FY26 and FY27.

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RBA Announcement (Tuesday)

The Reserve Bank of Australia is anticipated to hold rates steady, with money markets assigning roughly a 99% probability that the Cash Rate will remain at 4.35%. The central bank will also publish its quarterly Statement on Monetary Policy, incorporating updated economic projections — a release that will be closely read for any shifts in the RBA's inflation and growth forecasts that could signal the direction of policy over the coming months.

At its previous meeting in June, the RBA paused as expected after three consecutive hikes, though the accompanying language stayed hawkish. The Bank warned of potential further increases if necessary, citing persistent inflation and oil supply disruptions. It noted that headline and underlying inflation remained too high and committed to monitoring incoming data alongside its evolving risk assessment to guide decisions, while observing that short-term inflation expectations had eased but stayed above earlier-year levels.

The RBA stated that monetary policy was well positioned to respond to developments and reiterated its focus on delivering price stability and full employment, including raising the Cash Rate further if required. Governor Bullock reinforced this hawkish tone at the press conference, saying inflation remained too high and the Board was still concerned, though in a better position. She noted it was premature to judge whether the cooling housing market would aid policy, revealed the Board had not considered a hike at the meeting, but acknowledged upside risks remained and could not rule out further action.

Recent Australian data, however, point to reduced urgency for immediate policy changes. Q2 inflation cooled, with headline CPI at 0.6% Q/Q versus an expected 0.7% (prior 1.4%) and 3.9% Y/Y versus an expected 4.1% (prior 4.1%). The RBA's preferred Trimmed Mean CPI also came in softer than anticipated at 0.8% Q/Q (exp. 0.9%, prev. 0.8%) and 3.6% Y/Y (exp. 3.7%, prev. 3.5%), though it remained above the 2–3% medium-term target band. Labour market figures were encouraging, with June Employment Change surging to 76.3k (exp. 15k, prev. 40.3k) and the Unemployment Rate holding at 4.4%. Still, the Board has indicated it sees value in using the flexibility created by prior hikes to assess economic conditions, concluding that financial conditions are now likely somewhat tight.

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US CPI (Wednesday)

Consensus expects headline CPI to rise 0.1% M/M in July (prev. -0.4%) and the core rate to increase 0.2% M/M (prev. 0.0%). As the most closely watched monthly inflation gauge for markets and policymakers alike, the CPI release will shape expectations for the FOMC's September decision. Pantheon Macroeconomics argues these figures will be sufficient to keep the FOMC in a wait-and-see posture.

The consultancy projects core goods prices to climb 0.18% — which would mark the largest monthly gain since September — driven partly by Apple's (AAPL) decision to raise prices on most hardware by 15–30% effective 25th June. This is expected to be partially offset by declines in services components: airline fares are forecast to fall 1.5%, accommodation prices 1%, and auto insurance premiums are seen continuing their recent downward trend.

Pantheon anticipates CPI energy goods prices declining 2.6% in July, which it estimates would trim 11bps from the headline figure, while food-at-home prices are projected to rise a modest 0.2%. The consultancy cautions that the range of plausible outcomes is unusually wide for July, noting that August's inflation data will likely carry greater weight for the FOMC's September decision, where markets currently assign a 53% probability of a 25bps rate increase.

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Norges Bank Announcement (Thursday)

Norges Bank policymakers are expected to hold the policy rate at 4.25% at their 13th August meeting. As the central bank of one of the world's largest oil and gas exporters, Norges Bank's policy deliberations are uniquely informed by energy market dynamics that feed into both government revenues and domestic inflation. At its June gathering, the Bank's statement indicated that "it will likely be necessary to raise rates further at one of the forthcoming meetings," a view reflected in the policy rate path model within the Monetary Policy Report, which projected the rate peaking at 4.50% by end-2026.

Nordea argues for a hold in August, citing June core inflation of 2.7% Y/Y — well below Norges Bank's 3.3% projection. The Bank will also receive the July inflation report on Monday. July's CPI-ATE, the core measure favoured by Norges Bank, is expected to tick up to 2.8% Y/Y from 2.7% but remain below the Bank's 3.3% forecast. SEB highlights a second consecutive month of sharper-than-expected declines in food inflation, potentially signalling that food price pressures are finally easing.

Despite the projected uptick in core inflation, Nordea contends this should have limited bearing on Thursday's decision given that inflation sits below the Bank's forecast. Looking ahead, Nordea expects a rate hike in the autumn, expressing scepticism that underlying inflation is as subdued as recent reports suggest.

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UK GDP (Thursday)

The June and Q2 releases are expected to show continued growth, albeit at a moderated pace. The UK economy has struggled with among the weakest growth recoveries in the G7 since the pandemic, making even modest expansions significant for the policy outlook. In May, the series was supported entirely by the Services sector. For June, PMI commentary attributed the anticipated loss of momentum to "strong cost pressures, lacklustre demand and business uncertainties arising from the Middle East conflict."

For Q2, the preliminary reading is seen at 0.4% Q/Q (prev. 0.6%), reflecting June's projected -0.1% M/M (prev. 0.1%), with Y/Y growth at 1.2% (prev. 1.3%). The Bank of England will monitor the data closely, though its near-term priority remains inflation — particularly any evidence of second-round effects. Should recent developments toward a Middle East ceasefire prove durable, a soft GDP print could amplify the dovish signals observed at the last BoE meeting.

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US Retail Sales (Friday)

Consensus forecasts US retail sales to rise 0.2% M/M in June (prev. 0.2%), the core measure to gain 0.2% M/M (prev. -0.2%), and the control group to increase 0.3% M/M (prev. 0.5%). Given that consumer spending accounts for roughly two-thirds of US economic activity, these figures serve as a key barometer of whether household demand is sustaining the momentum seen in recent ISM and labour market data. The Chicago Fed's July advance retail trade summary projects retail and food services sales ex-autos rising +0.1% M/M on a seasonally adjusted basis, and unchanged after adjusting for inflation.

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Week in Review

OPEC JMMC Review

The OPEC-7 agreed to raise output by a nominal 188k BPD in September, as expected, completing the rollback of voluntary cuts introduced in 2023. The group maintained a cautious supply outlook, expressing concern over recent attacks on energy infrastructure and disruptions to international shipping lanes amid heightened geopolitical tensions, while noting associated risks to energy security and market stability.

Attention also remained on compliance and compensation cuts, with overproducing members expected to offset excess output by December 2026. The broader layer of approximately 2mln BPD of OPEC+ cuts stays in place through year-end. The seven producers are scheduled to convene again on 6th September, with the next JMMC meeting set for 4th October. The official statement made no reference to Q4 supply policy for October–December, making the next gathering particularly significant amid expectations of a pause in output increases.

Chinese RatingDog PMIs Review

Chinese RatingDog PMIs indicated a notable loss of momentum in July, though both manufacturing and services remained marginally in expansion. Manufacturing PMI slipped to 50.9 from 51.7 (exp. 51.5), a four-month low, though new orders continued to rise and new export orders returned to expansion. Services PMI fell sharply to 50.4 from 54.1 — the slowest growth pace since September 2024 — as softer domestic demand weighed on new business and 12-month business confidence dropped to its lowest since February 2020. Consequently, the Composite PMI declined to 50.8 from 53.6.

The RatingDog surveys were somewhat more resilient than the official NBS PMIs, which contracted in both manufacturing and non-manufacturing. The broader takeaway remained one of weakening Chinese economic momentum and soft domestic demand, adding to evidence of an H2 slowdown and keeping focus on whether Beijing will deliver additional policy support.

Quarterly Refunding Review

The Treasury maintained next quarter's coupon auction sizes, consistent with expectations and prior guidance. Forward guidance was unchanged, with the Treasury continuing to anticipate "maintaining nominal coupon and FRN auction sizes for at least the next several quarters." The steady issuance plan provides the market with a predictable supply backdrop as investors assess the trajectory of fiscal deficits and their implications for longer-dated yields.

In the TBAC Minutes, dealers generally expect nominal coupon auction sizes to increase sometime in 2027 (prev. early 2027), anticipating the Treasury will adjust forward guidance several quarters ahead. The Committee continues to believe higher coupon issuance may be warranted during FY2027 and discussed potential changes to the Treasury's forward guidance.

TIPS auction sizes were maintained: the 30-year reopening in August at USD 8bln, the 10-year reopening in September at USD 19bln, and the new 5-year issue in October at USD 26bln. FRN auction sizes were also unchanged.

Next week, the Treasury will offer USD 125bln in coupon securities to refund approximately USD 96.3bln of privately held notes and bonds maturing 15th August, raising USD 28.7bln in new cash. The refunding comprises USD 58bln in 3-year notes on Tuesday, USD 42bln in 10-year notes on Wednesday, and USD 25bln in 30-year bonds on Thursday.

Regarding bills, the Treasury expects to maintain current benchmark auction sizes in the coming weeks and may issue a short-dated Cash Management Bill (CMB) around end-August. It then plans to reduce short-dated bill auction sizes in September before increasing sizes across the bill curve in October for seasonal fiscal outflows. The Treasury continues to assume a USD 950bln end-September cash balance but now projects the Treasury General Account (TGA) to peak at approximately USD 1.05tln (+/-USD 50bln) in late October, up from the prior USD 1.0tln estimate. Quarterly buyback caps were left unchanged at up to USD 38bln for liquidity support and USD 25bln in the one-month to two-year bucket for cash management.

RBI Review

The RBI held the Repurchase Rate at 5.25% unanimously, as expected, maintaining a neutral policy stance. Governor Malhotra said growth continues to be underpinned by domestic demand and that greater inflation clarity is needed before any policy action. The RBI projects FY27 real GDP growth at 6.7% (prev. 6.6%) and FY27 CPI at 5.0% (prev. 5.1%). Malhotra added the RBI will ensure sufficient banking system liquidity, curb excess volatility, and check speculation in the foreign exchange market, with additional measures forthcoming. The central bank's language emphasised uncertainty and signalled no urgency for immediate rate adjustments, prioritising incoming data to assess inflation's trajectory.

BCB Review

The Brazilian Central Bank cut the Selic rate by 25bps to 14% unanimously, in line with expectations. The Bank noted economic indicators suggest gradual moderation in activity at a resilient level, with mixed sector signals and a tight labour market. Headline inflation decelerated but remained above the target's upper limit, while underlying inflation measures eased slightly below that ceiling.

The BCB stated that "the risks to inflation, both to the upside and to the downside, remain higher than usual, with an upward asymmetry." It will continue monitoring how domestic fiscal policy developments affect monetary policy and financial assets, reinforcing its cautious posture amid heightened uncertainty. The Bank acknowledged that recent activity is consistent with a deceleration trajectory for FY2026 and is closely watching for further deanchoring of longer-term inflation expectations. The current environment of high uncertainty, deanchored expectations, and elevated risks "requires serenity and caution in the conduct of monetary policy." Pantheon Macroeconomics noted that the hurdle for faster easing remains high.

US ISM Manufacturing PMI Review

US manufacturing accelerated in July, with the ISM Manufacturing PMI rising to 55.6 from 53.3 (exp. 54.0) — its highest since May 2022. The report showed broad-based strength: production surged to 58.5 (prev. 52.2), new orders rose to 56.7 (prev. 56.0), employment returned to expansion at 52.8 (prev. 49.7) for the first time in 33 months, and both order backlogs (55.0 vs. prev. 50.5) and export orders (53.0 vs. prev. 48.5) strengthened. Price pressures stayed elevated despite a slight easing, with the Prices Paid Index at 71.1 (exp. 70.3, prev. 73.0). Supplier deliveries slowed further and customers' inventories remained "too low," signalling persistent supply constraints.

ISM noted manufacturing expanded at its fastest pace in over four years, with the survey implying annualised real GDP growth of approximately 2.8%. Respondents cited robust demand from AI-related semiconductor, data centre, and defence spending, though many also flagged rising input costs, longer lead times, and supply shortages, with steel, aluminium, tariffs, and the renewed Middle East conflict sustaining upward price pressure. Oxford Economics said the sector has shifted into a higher gear with solid momentum, expecting defence and semiconductor-related machinery demand to remain key growth drivers, but cautioned that supply bottlenecks and persistent costs are likely to keep manufacturing inflation sticky.

US ISM Services PMI Review

The ISM Services PMI was little changed at 54.1 in July (exp. 54.5, prev. 54.0), remaining in expansion for a 25th consecutive month but missing expectations. Internally, the report was mixed. Business Activity jumped to 59.1 from 55.4 — its second-highest reading since May 2024 — and New Orders accelerated to 57.2 from 55.1, indicating robust demand. However, the Employment Index fell back into contraction at 47.4 from 51.2, the 12th contractionary reading in 18 months, reinforcing signs of a largely jobless expansion.

The Prices Paid Index climbed to 70.3 from 67.7, topping 70 for the fourth time in five months and underscoring persistent cost pressures, though supplier deliveries continued to ease and order backlogs slowed, suggesting limited broader supply chain strains. Respondents noted tariff impacts and Middle East tensions were cited less frequently than in prior months, while concerns persisted around inflation, mortgage rates, and petroleum costs. ISM indicated the survey historically corresponds to annualised real GDP growth of roughly 1.9% in Q3. Oxford Economics said the report reinforces its view that the economy remains on solid footing at the start of Q3, with a weighted average of the manufacturing and services ISMs pointing to GDP growth just above 2% annualised.

Swedish Inflation Review

Swedish inflation exceeded both consensus and the Riksbank's forecast, triggering a modest SEK rally. CPIF fell to 0.7% Y/Y (exp. 0.6%), while the monthly figure showed shallower-than-expected deflation at -0.3% M/M. Although hotter than the Riksbank projected, the data likely endorses rather than alters the current rate path, with markets fully pricing a 25bps hike by year-end. ING and Nordea maintained their respective year-end calls for unchanged rates and one hike.

Banxico Review

Banxico held rates at 6.50% unanimously, as expected, and maintained forward guidance signalling an extended hold. "Looking ahead, the Governing Board estimates that it will be appropriate to maintain the reference rate at its current level." Banxico adopted this language in May, signalling the conclusion of its easing cycle. The balance of risks for the inflation trajectory remains biased to the upside. Both headline and core inflation are still expected to decline over the forecast horizon, though more gradually than previously anticipated. Banxico now projects headline inflation converging to target in Q4 2027, compared with its prior Q2 2027 estimate.

Chinese Trade Data Review

Chinese trade data came in firmer than expected in July. The trade surplus widened to USD 112.5bln (exp. 107.0bln), though easing from June's USD 125.62bln. Exports rose 23.9% Y/Y (exp. 22.2%), supported by continued strength in global technology demand. Imports climbed 27.5% Y/Y (exp. 27.9%), cooling from June's 36.0% surge but remaining robust. Export strength was also bolstered by continued front-loading of shipments ahead of potential Western tariffs and other protectionist measures.

Canadian Jobs Review

Canadian employment data was robust in July, contrasting with the softer US report. Employment surged by 75k (exp. 12.5k, prev. 18.2k), with a healthy composition of 38.6k full-time and 36.6k part-time positions. The unemployment rate unexpectedly ticked down to 6.4% from 6.5% (exp. 6.5%) despite the participation rate rising to 65.1% from 65.0%.

The strong labour market data should reinforce the BoC's patient policy approach. With rates near the lower end of neutral estimates, the Bank has been assessing the outlook amid competing risks from Middle East-driven inflation pressures and downside growth risks tied to US-Canada trade uncertainty. A report of this magnitude reduces urgency for additional policy support. However, Oxford Economics cautioned that the "surprisingly strong July job growth is unlikely to be sustained."

US Jobs Report Review

US jobs data fell short of expectations in July. Headline payrolls declined by 23k (exp. 91k), while two-month net revisions totalled a substantial -103k. Analysts had anticipated significant revisions because June's payroll figure was based on roughly half the usual survey responses, with the BLS relying on modelling rather than reported data.

Internal sector figures were stark: government payrolls fell by 53k (Pantheon Macro attributed this primarily to a one-time decline in education payrolls at the school year's end), and leisure and hospitality dropped by 40k, potentially reversing recent gains. Private payrolls also missed at 30k (exp. 78k); the ADP report earlier in the week had foreshadowed this after also undershooting expectations. The jobless rate slipped to 4.1% (exp. 4.2%), likely reflecting a one-tenth decline in the participation rate to 61.4%. Wage growth softened, with average hourly earnings rising just 0.1% M/M (exp. 0.3%), lowering the annual rate to 3.2% Y/Y (exp. 3.5%).

Following the data, money markets' implied probability of September rate hikes tilted dovishly, pricing a 44% chance versus approximately 55% before the release. FOMC participants have recently described the jobs market as generally stable, directing attention toward returning inflation to target. Consequently, next week's CPI and PPI data — alongside PCE inflation due 26th August — may carry greater weight in shaping expectations for the September meeting.