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MNI GLOBAL WEEK AHEAD - Host of DM CPI Reports, ECB Decision

Developed Markets

MONDAY - Fed Chair Powell Q&A At Economic Club of Washington D.C

On Monday, Fed Chair Powell makes his final scheduled appearance ahead of the pre-July FOMC meeting communications blackout period (which starts Friday night) with a Q&A session at the Economic Club of Washington D.C. This provides an opportunity for Powell to comment on the potential policy impact from another surprisingly soft CPI data report for June which has markets now pricing in two and possibly three rate cuts this year starting in September. Without giving much away, Powell is likely to offer cautious optimism, with the key to cutting rates now being further evidence that inflation is not just headed to 2% but as per the existing guidance, “sustainably”. For now, it looks very likely that July’s meeting will be used to open the door to a September cut should the July and August inflation data paint a similar picture.

TUESDAY - Canada June CPI

It’s an important start to the week for Canadian data, with the BoC’s quarterly business and consumer surveys for Q2 on Monday before the June CPI report is the highlight on Tuesday. Market pricing concerning a cut on Jul 24 has been particularly fluid since the BoC opted for the first rate cut of the cycle in June. Another marked increase in the unemployment rate has played a large role in this reversal, but so too have US factors including a dovish payrolls report and soft US CPI. We suspect this June Canadian CPI report could be pivotal in expectations heading into the July decision. A return to more subdued core CPI M/M readings after the first upside surprise in months in May could see a shift closer to fully pricing in a second BoC cut. The BoC’s preferred median and trim measures averaged 2.5% annualized over the three months to May whilst the six-month rate of 2.9% held within the 1-3% target band for the second month running.

WEDNESDAY - New Zealand Q2 CPI

NZ Q2 CPI on July 17 will be even more important now following the RBNZ's dovish shift at its July 10 meeting. It is likely to come in close to the RBNZ's expectation in May of 0.6% q/q and 3.6% y/y. The focus will be on the domestically-driven components though, such as non-tradeables, which surprised to the upside in Q1 and have been sticky. The RBNZ now believes that excess capacity should be enough to reduce them.

WEDNESDAY / THURSDAY - Eurozone Final Inflation and ECB Decison

Few new policy signals are expected at the ECB’s July decision on Thursday. Policy rates are unanimously expected to be kept on hold, and President Lagarde will likely re-iterate the ECB’s data dependent approach to future easing. Despite the “data dependent” stance, multiple ECB speakers have pointed to quarterly projection meetings as the likely gatherings to decide upon future rate moves. This leaves interest rate markets pricing an ~80% implied probability of the next 25bp cut in September, with 45bps of cumulative easing priced through year-end. The day before the ECB decision, we receive final Eurozone June inflation data. Of most interest will be the ECB’s underlying inflation metrics (e.g. PCCI), though any further disinflationary progress in these series’ will still need to be weighed against services inflation’s stickiness over the past few months.

WEDNESDAY / THURSDAY - UK CPI and Labour Market Data

Inflation (Wed) and labour market data (Thurs) will be crucial for the August 1 MPC policy announcement which at the time of writing markets are expecting could either see the first 25bp cut delivered or the BOE remaining on hold until later this year. Both Haskel and Mann have remained on the hawkish side of the spectrum and seem no closer to voting for a cut while Pill’s speech this week remained non-committal. May’s headline CPI print was broadly in line with expectations but driven by higher-than-expected services inflation offset by lower food and core goods prices – a particularly suboptimal breakdown for the MPC. Last month’s labour market data was broadly in line with expectations (and we still think private sector regular pay growth is the key here) but we did see an increase in the claimant count – it will be closely watched again here.

FRIDAY - Japan June CPI

The market is looking for relatively steady June CPI trends in y/y terms. Headline is projected unchanged at 2.8%y/y, while the core measures are expected to tick higher and remain above the BoJ's longer term 2% target. Base effects will be more favorable to positive y/y momentum as H2 unfolds. Japan households are also expecting more heightened inflation pressures over the coming 12 months (per a RTRS survey).

Emerging Markets

WEDNESDAY - BI Decision (Indonesia)

Bank Indonesia meets on July 17 and is widely expected to leave rates as 6.25% as inflation remains well within the 1.5-3.5% band and the rupiah has strengthened since the last meeting. However, FX stability will remain the central bank's focus and rates are likely to be unchanged until the Fed eases and the IDR has strengthened further. BI is likely to continue to use tools other than rates to defend the currency and macroprudential policies to support the economy.

THURSDAY - SARB Decision (South Africa)

Most analysts expect the SARB to keep interest rates on hold at their multi-year highs next week. However, a strengthening rand, more balanced inflation risk profile, moderating inflation expectations, as well as the prospect of looser monetary policy in the US, suggest that the South African central bank is getting closer to lowering rates.


DateGMT/LocalImpactFlagCountryEvent
15/07/20240200/1000***CN GDP
15/07/20240200/1000***CN Fixed-Asset Investment
15/07/20240200/1000***CN Retail Sales
15/07/20240200/1000***CN Industrial Output
15/07/20240200/1000**CN Surveyed Unemployment Rate M/M
15/07/20240700/0900EU ECB's Lagarde and Cipollone in Eurogroup meeting
15/07/20240900/1100**EU Industrial Production
15/07/20241230/0830**CA Monthly Survey of Manufacturing
15/07/20241230/0830**CA Wholesale Trade
15/07/20241230/0830**US Empire State Manufacturing Survey
15/07/20241430/1030**CA BOC Business Outlook Survey
15/07/20241435/1035US San Francisco Fed's Mary Daly
15/07/20241530/1130*US US Treasury Auction Result for 13 Week Bill
15/07/20241530/1130*US US Treasury Auction Result for 26 Week Bill
15/07/20241630/1230US Fed Chair Jerome Powell
16/07/20240700/0900EU ECB's De Guindos in ECONFIN meeting
16/07/20240800/1000**EU ECB Bank Lending Survey
16/07/20240800/1000**IT Italy Final HICP
16/07/20240900/1100***DE ZEW Current Conditions Index
16/07/20240900/1100***DE ZEW Current Expectations Index
16/07/20240900/1100*EU Trade Balance
16/07/20240900/1000**UK Gilt Outright Auction Result
16/07/20241215/0815**CA CMHC Housing Starts
16/07/20241230/0830**US Import/Export Price Index
16/07/20241230/0830***CA CPI
16/07/20241230/0830***US Retail Sales
16/07/20241255/0855**US Redbook Retail Sales Index
16/07/20241400/1000*US Business Inventories
16/07/20241400/1000**US NAHB Home Builder Index
16/07/20241530/1130*US US Treasury Auction Result for Cash Management Bill
16/07/20241845/1445US Fed Governor Adriana Kugler
17/07/20242245/1045***NZ CPI inflation quarterly
17/07/20240600/0700***UK Consumer inflation report
17/07/20240600/0700***UK Producer Prices
17/07/20240900/1100***EU HICP (f)
17/07/20240900/1000**UK Gilt Outright Auction Result
17/07/20241030/1130UK King's Speech
17/07/20241100/0700**US MBA Weekly Applications Index
17/07/20241230/0830*CA International Canadian Transaction in Securities
17/07/20241230/0830***US Housing Starts
17/07/20241300/0900US Richmond Fed's Tom Barkin
17/07/20241315/0915***US Industrial Production
17/07/20241335/0935US Fed Governor Christopher Waller
17/07/20241430/1030**US DOE Weekly Crude Oil Stocks
17/07/20241700/1300**US US Treasury Auction Result for 20 Year Bond
17/07/20241800/1400US Fed Beige Book
18/07/20242350/0850**JP Trade
18/07/20240130/1130***AU Labor Force Survey
18/07/20240600/0700***UK Labour Market Survey
18/07/20240900/1100**EU Construction Production
18/07/20241215/1415***EU ECB Deposit Rate
18/07/20241215/1415***EU ECB Main Refi Rate
18/07/20241215/1415***EU ECB Marginal Lending Rate
18/07/20241230/0830***US Jobless Claims
18/07/20241230/0830**US WASDE Weekly Import/Export
18/07/20241230/0830**US Philadelphia Fed Manufacturing Index
18/07/20241245/1445EU ECB Monetary Policy Press Conference
18/07/20241415/1615EU ECB's Lagarde presents MonPol decision on podcast
18/07/20241430/1030**US Natural Gas Stocks
18/07/20241605/1205US San Francisco Fed's Mary Daly
18/07/20241700/1300**US US Treasury Auction Result for TIPS 10 Year Note
18/07/20241745/1345US Dallas Fed's Lorie Logan
18/07/20242000/1600**US TICS
19/07/20242301/0001**UK Gfk Monthly Consumer Confidence
19/07/20242330/0830***JP CPI
18/07/20242345/1945US Fed Governor Michelle Bowman
19/07/20240600/0700***UK Retail Sales
19/07/20240600/0700***UK Public Sector Finances
19/07/20240600/0800**DE PPI
19/07/20240800/1000**EU EZ Current Account
19/07/20241230/0830*CA Industrial Product and Raw Material Price Index
19/07/20241230/0830**CA Retail Trade
19/07/20241440/1040US New York Fed's John Williams
19/07/20241700/1300**US Baker Hughes Rig Count Overview - Weekly
19/07/20241700/1300US Atlanta Fed's Raphael Bostic

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