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Traders and investors are bracing for a data-heavy week on the global economic calendar, headlined by the release of the latest US Federal Reserve meeting minutes, alongside European Central Bank minutes, inflation figures across several Asian economies, and rate decisions from New Zealand and Malaysia's central banks.
These events unfold as markets try to gauge the long-term impact of the energy price shock following the fragile Middle East truce, making the week ahead a pivotal moment for shaping the outlook on global monetary policy in the months to come.
Investors are looking to Wednesday's release of the latest Federal Reserve meeting minutes — the first under new Fed Chair Kevin Warsh, who held interest rates steady in a range of 3.5%-3.75% at the meeting.
The minutes carry particular weight because the post-meeting statement itself was relatively brief, leaving markets hungry for more detail on the committee's internal debate.
Analysts expect the minutes to offer deeper insight into the Federal Open Market Committee's thinking on the path of interest rates, making them a key tool for traders positioning ahead of upcoming meetings.
Following the meeting, Warsh emphasized the need to tackle rising inflation, prompting markets to price in a greater chance of a rate hike. However, his subsequent comments suggested that inflation upside risks had eased during his first weeks in office, as Middle East tensions cooled.
By contrast, US jobs data for June came in far weaker than expected, with the economy adding just 57,000 jobs despite a modest dip in the unemployment rate.
According to LSEG data, markets are currently pricing in a 25-basis-point rate hike in December, with a strong chance of an earlier move in October. Yet with price pressures easing and signs of labor market weakness emerging, Keator Group's Lindsey Bell argues these hikes may not materialize — underscoring why the Fed minutes will be closely scrutinized by investors.
In Canada, all eyes are on June jobs data due Friday, following a strong May reading in which the economy added 87,800 jobs and unemployment fell to 6.6%. While the Bank of Canada welcomed those figures at its last meeting, it noted that employment has shown little net change since the start of the year once monthly volatility is stripped out.
The eurozone's economic calendar is relatively light this week, but still features several notable releases:
Oxford Economics' chief Italian economist Nicola Nobile notes that recent eurozone data points to a common theme: the economy appears to be stabilizing after the Middle East shock. While the worst of the inflation-driven hit to activity looks to be over, he adds that underlying momentum remains modest, even if somewhat stronger than expected at the peak of the crisis.
The standout European event will be the ECB's release of its June meeting accounts on Thursday, after the central bank raised its key deposit rate by 25 basis points to 2.25%. Eurogroup and ECOFIN finance ministers' meetings are also scheduled for Thursday and Friday.
The Bank of England will also publish its Financial Stability Report the same day, including preliminary results from its System-Wide Exploratory Scenario (SWES) — the world's first study of its kind examining how the broader UK financial system, beyond traditional banking, would hold up under a market shock, amid growing concerns over private credit markets.
Third, Asian Economies: China's Inflation Data
Japan
The Bank of Japan holds a branch managers' meeting and releases its regional economic report on Thursday, which could shed light on how Middle East uncertainty and higher oil prices are affecting small businesses. May household spending and current account data are due Tuesday and Wednesday, respectively.
On the monetary policy front, the BOJ continues outright purchases across three tenors of Japanese government debt on Monday, spanning short-term bonds of up to one year and longer-dated bonds out to 25 years — a move likely to support the domestic bond market.
China
Markets turn to Thursday's Chinese inflation data to gauge the impact of reflation stemming from the Iran crisis, at a time when domestic demand remains soft. ANZ's Asia research economist Betty Wang expects consumer price inflation to hold steady at 1.2% year-on-year, while producer price inflation is forecast to rise to 4.0% from 3.9% the previous month, helped by a lower base effect even as global oil prices fall following the Middle East ceasefire.
Economists note that weak domestic demand continues to weigh on inflation momentum, pointing to the first contraction in retail sales growth since the pandemic began, alongside a still-struggling property market that keeps income expectations subdued. The People's Bank of China is also due to release June foreign exchange reserves data on Tuesday.
The Fed minutes remain this week's most consequential event for traders, given their direct bearing on rate market pricing and the US dollar. In parallel, the ECB's meeting accounts, the Bank of England's Financial Stability Report, and China's inflation data all warrant close attention, as they will help shape trading conditions across rates, currencies, and bond markets in the weeks ahead.
Disclaimer: The content published above has been prepared by CFI for informational purposes only and should not be considered as investment advice. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell. The information provided does not have regard to the specific investment objectives, financial situation, and needs of any specific person who may receive it, and is not held out as independent investment research and may have been acted upon by persons connected with CFI. Market data is derived from independent sources believed to be reliable, however, CFI makes no guarantee of its accuracy or completeness, and accepts no responsibility for any consequence of its use by recipients.
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