This week, with attention turns to the US inflation report, which is expected to show that prices rose at a softer pace, driven by a drop in gasoline costs. The headline inflation is seen rising 0.2% month-on-month, which would be the smallest monthly gain since January 2021 and result in the annual rate of inflation slowing to 8.7% from 9.1%. Still, core inflation likely rose 0.5% over the previous month, pushing the annual rate to 6.1% from 5.9%. Other first-tier releases in the US calendar include the producer price index and the University of Michigan sentiment index. Elsewhere in America, it will be interesting to follow inflation figures from Brazil and Mexico and the monetary decision from Mexico's central bank.
Across the Atlantic, the United Kingdom will be publishing its preliminary estimate of second-quarter GDP growth, alongside business investment, trade balance, manufacturing and construction output. The British economy likely contracted 0.2% in April-June, after a 0.8% expansion in the previous period, as higher energy prices and tax raises curtailed consumption.
Elsewhere in Europe, final estimates of July’s consumer prices are expected to confirm inflation eased slightly in Germany and Italy but continued to accelerate in France and Spain. At the same time, factory activity in the Euro Area probably stalled in July following two months of increases. Other data to follow include Switzerland unemployment rate; Russia Q2 GDP data; and Turkey industrial production and jobless rate.
In Asia, China will release trade data for July, with exports set to continue to pick up sharply as investors monitor the impact of the gradual reopening of the economy from Covid lockdowns. Investors will also keep a close eye on upcoming inflation data, after June’s figure hit a two-year high. In India, the Ministry of Statistics will publish fresh inflation figures for July, marking more than two months since the start of the RBI’s tightening cycle. Moving to Australia, noteworthy releases include Westpac consumer confidence for August and NAB business confidence for July. Elsewhere, the Bank of Thailand is set to start its tightening cycle with a 25bps interest rate hike. Meanwhile, South Korea, Malaysia, and the Philippines, will release unemployment rates.