Mon: Norwegian CPI (Jul), Japanese Mountain Day HolidayTue: US-China truce deadline (likely to be extended), RBA Announcement (Aug), UK Jobs Report (Jun), German ZEW Survey (Aug), US CPI (Jul), EIA STEO, OPEC MOMRWed: German Final CPI (Jul), Spanish Final CPI (Jul)Thu: Norges Bank Announcement, Australian Jobs Report (Jul), UK GDP (Jun\/Q2), Swedish CPIF (Jul), EZ Flash GDP (Q2) and Employment (Q2), US PPI (Jul)Fri: Japanese GDP (Q2), Chinese Activity Data (Jul), US Retail Sales (Jul), US University of Michigan Prelim (Aug)<\/p>\n
Potential Trump-Putin Summit (Tbc): <\/p>\n
The Kremlin said a US\u2013Russia summit will take place \u201cin the coming
\ndays,\u201d while the White House said it is working on the details and that
\nPresident Trump is open to the meeting. Russia\u2019s deputy UN ambassador,
\nPolyanskiy, said Russian President Putin may meet President Trump next week,
\nbut was not aware of any planned meeting between Putin and Ukrainian President
\nZelensky. Putin suggested the UAE as a \u201csuitable\u201d venue following talks with
\nUAE President Al Nahyan. Kremlin aide Ushakov said discussions will focus on a
\nUkraine ceasefire but dismissed Washington\u2019s mention of a trilateral summit
\nwith Zelensky, with Putin reiterating conditions for such a meeting are \u201cfar
\nfrom\u201d being met. The summit comes amid Trump\u2019s recently shortened deadline for
\nMoscow to show progress or face new sanctions; some analysts suggest Putin may
\nbe using the talks to buy time and blunt US measures. Kyiv and European leaders
\nremain cautious of any deal struck without Ukraine present, warning it could
\ninvolve territorial concessions. Markets will likely focus on confirmation of
\ntiming, venue, and thereafter, whether the summit produces substance. On the
\nflip side, a lack of progress could see additional Russian sanctions alongside
\nsecondary sanctions for countries doing business with Russia.<\/p>\n
Chinese Inflation (Sat): <\/p>\n
July CPI Y\/Y is expected at -0.1% (prev. -0.1%), with M\/M seen at
\n+0.3% (prev. -0.1%), while PPI Y\/Y is forecast at -3.4% (prev. -3.6%). ING
\nnotes deflationary pressures persist as activity moderates, with
\nanti-price-competition measures unlikely to deliver early relief. Meanwhile,
\nSCMP highlights continued weakness in food prices (June -0.3% Y\/Y, fifth
\nmonthly decline), driven by severe oversupply in pork (-8.5% Y\/Y) and eggs
\n(-7.7%), with farmers reporting widespread losses and weak end-market demand.
\nMarginal improvements are expected in H2, but the scope for recovery remains
\nlimited, according to SCMP.<\/p>\n
Us-China Truce Deadline (Tue): <\/p>\n
The US-China tariff truce, set to expire on August 12th, is likely
\nto be extended by 90 days, according to US Commerce Secretary Lutnick on
\nThursday. Following the meeting in Sweden, Beijing has confirmed consensus on
\nthe extension, but the White House has yet to formally announce the move, with
\nUSTR Greer saying the two sides are \u201cworking towards\u201d a deal. The current pause
\nfollows months of tariff escalation, with US duties on Chinese imports reaching
\nup to 145% since April, met in turn by Chinese retaliatory tariffs of up to
\n125% and export controls on key raw materials. The decision comes as US
\nPresident Trump\u2019s new tariffs on imports from ~90 countries took effect on
\nAugust 7th, whilst more notably for Beijing, the US imposed an extra 25%
\nstacked penalty on India for the import of Russian oil, with China also likely
\nin the firing line. Markets will focus on confirmation of the extension and
\nextension period, alongside any threats of penalties, whilst there is a
\nnon-zero chance of no extension and a return to eye-watering tariffs.<\/p>\n
RBA Announcement (Tue):<\/p>\n
The RBA is likely to cut rates at its meeting next week as a
\nrecent Reuters poll showed all 40 economists surveyed unanimously expect the
\nRBA to cut the Cash Rate by 25bps to 3.60%, while money markets are pricing in
\na 98% likelihood of a 25bps cut and a 2% probability of a larger 50bps
\nreduction. As a reminder, the RBA surprised markets at the last meeting by
\npausing on rates amid wide expectations for a 25bps cut, while its decision was
\nmade by a majority of 6-3 votes and stated that the Board will be attentive to
\nthe data and evolving assessment of risks to guide its decisions. RBA also
\nnoted that inflation has continued to moderate and the outlook remains
\nuncertain, although the Board continues to judge that the risks to inflation
\nhave become more balanced and the labour market remains strong. Furthermore,
\nthe Board remained cautious about the outlook, particularly given the
\nheightened level of uncertainty about both aggregate demand and supply, and it
\njudged that it could wait for a little more information to confirm that
\ninflation remains on track to reach 2.5% on a sustainable basis. RBA Governor
\nBullock noted during the post-meeting presser that there will be more data and
\nnews by the next meeting, and it was appropriate to have a cautious stance on easing,
\nbut noted she is confident they are on a path to ease further, although timing
\nis the question and they can expect rates to decline if inflation slows as
\nexpected. Since then, the language from the central bank hasn\u2019t provided much
\nto shift the dial, although the data releases would support the case for a cut
\nafter disappointing jobs data which showed the Unemployment Rate unexpectedly
\nrose in June to its highest in three and a half years of 4.3% (Prev. 4.1%),
\nwhile inflation continued to soften in Q2 with headline Australian CPI YY
\nslowing to 2.1% vs. Exp. 2.2% (Prev. 2.4%).<\/p>\n
Uk Jobs Report (Tue): <\/p>\n
Expectations are for the ILO unemployment rate in the 3-month
\nperiod to June to hold steady at 4.7%, whilst average earnings (ex-bonus) 3M\/YY
\nare forecast to remain at 5.0%, according to Reuters. As a reminder, the prior
\nrelease showed the ILO unemployment rate continued to tick higher, rising to
\n4.7% in the 3M period to May from 3.6%. However, the large contraction in the
\nMay HMRC payrolls change was revised materially higher and wage growth remained
\nat an elevated rate. This time around, economists at Pantheon Macroeconomics
\nexpect the upcoming report to show \u201cpayroll job falls easing and earnings
\ngrowth holding at a solid pace\u201d. More specifically, the consultancy is of the
\nview that June\u2019s payroll drop will be revised to a smaller 8K month-to-month
\nfall and July\u2019s print to come in at -7k. For the unemployment rate, PM expects
\nanother print of 4.7%, whilst vacancies appear to have stabilised and could
\neven be rising again. On the wage front, Pantheon expects a slowdown in the 3M
\nY\/Y ex-bonus metric to slow to 4.8% from 4.9%, which would be below the MPC\u2019s
\nQ2 forecast of 5.2%. From a policy perspective, up until the August BoE policy
\nannouncement, it had appeared that the MPC was increasingly focused on the
\nloosening in the labour market. However, absent a marked deterioration in the
\nupcoming report, the latest vote split suggests that the stubbornness of
\ninflation could limit the BoE\u2019s easing plans. As it stands, the next 25bps rate
\ncut is not fully priced until February 2026.<\/p>\n
US CPI (Tue):<\/p>\n
US July CPI is expected to rise by +0.2% M\/M at the headline level
\n(prev. +0.3%), with the annual rate seen rising to 2.8% Y\/Y from 2.7%. The core
\nrate of inflation is expected to rise by +0.3% M\/M (prev. +0.2%), with the
\nannual rate of core inflation expected to rise to 3.0% Y\/Y from 2.9%. Wells
\nFargo says that the data will bring further signs of higher tariffs pushing up
\nprices. \u201cIt is still early in the price adjustment process to see how higher
\nimport taxes will ultimately be distributed between the end-customer, domestic
\nsellers and foreign exporters,\u201d the bank writes, \u201cat the same time, growing
\nconsumer fatigue is making it more difficult to raise prices in general.\u201d Wells
\nFargo expects inflation to pick up, but not ratchet higher, in H2 of this year,
\nand sees both the core CPI and core PCE deflator returning to around 3% in Q4.
\nSome on the Fed are more concerned about the labour market (Waller and Bowman),
\nbut others still believe that inflation is further away from the Fed\u2019s goals.
\nHigh inflation and fears of higher inflation ahead in response to tariffs is
\nseeing the Fed hold a wait-and-see approach. However, with the recent July NFP
\nreport painting a softer picture of the labour market than initially thought
\n(due to chunky downward revisions), markets are now looking for a rate cut in
\nSeptember. Fed\u2019s Daly has since spoken on the matter, noting the Fed cannot
\nwait forever.<\/p>\n
Norges Bank Announcement: <\/p>\n
Norges Bank is expected to keep rates steady at 4.25%, after the
\nBank unexpectedly cut rates by 25bps at the last meeting. Policymakers
\nexplained their decision by suggesting core inflation declined somewhat faster
\nthan expected, and as such, their inflation outlook is lower than previously
\nexpected. On future policy, the Bank said it \u201cwill be reduced further in the
\ncourse of 2025\u201d, should the economy evolve as projected. Into this meeting, the
\nBank will have two inflation reports to digest; June\u2019s Core CPI-ATE printed a
\ntouch above the consensus (but in line with Norges Bank\u2019s own forecast). July\u2019s
\nmetrics are yet to come out, SEB predicts CPI-ATE (Y\/Y) will print at 3.0% (vs.
\nNorges Bank forecast of 3.1%). Given both SEB and Danske Bank call for a cut in
\nSeptember and December, a softer inflation outturn for July could have policy
\nimplications in the immediacy \u2013 particularly in the context of a gradually
\ncooling labour market.<\/p>\n
Australian Jobs Report (Thu): <\/p>\n
There are currently no forecasts for the Australian jobs report,
\nwhich in June metrics missed expectations, with employment rising just 2k (exp.
\n+20k) and the jobless rate climbing to 4.3% (exp. 4.1%) \u2013 the highest since
\nlate 2021. The report comes after the RBA\u2019s August meeting, in which the
\ncentral bank is likely to cut rates. A recent Reuters poll showed all 40
\neconomists surveyed unanimously expect the RBA to cut the Cash Rate by 25bps to
\n3.60%, while money markets are pricing in a 98% likelihood of a 25bps cut and a
\n2% probability of a larger 50bps reduction. As a reminder, the RBA surprised
\nmarkets at the last meeting by pausing on rates amid wide expectations for a
\n25bps cut, while its decision was made by a majority of 6-3 votes, and it
\nstated that the Board will be attentive to the data and evolving assessment of
\nrisks to guide its decisions. Markets will focus on whether the July jobs data
\nconfirms a trend of soft hiring and rising unemployment.<\/p>\n
UK GDP (Thu):<\/p>\n
Expectations are for M\/M GDP in June to pick up to 0.1% from -0.1%
\nwith the Q\/Q growth rate expected to slow to 0.1% from 0.7%. As a reminder, the
\nMay release showed a second M\/M monthly decline. Albeit it followed on from a
\nstrong Q1, which was artificially boosted by the front-loading of expected
\ntariffs. This time around, analysts at Investec hold an above-consensus
\nforecast of +0.3%, noting that \u201cmanufacturing activity, according to the PMI
\nindices, looks less soft than before\u201d. Additionally, the desk looks for an
\nexpansion in the services sector and for construction to rebound from the 0.6%
\nretracement seen in May. A 0.3% outturn would lead to a Q2 Q\/Q rate of 0.2% and
\nleave the economy in a position to grow by some 1.2%-1.3% over 2025 as a whole,
\na touch above the official Spring Statement forecast from the OBR of 1.0%. From
\na policy perspective, a soft outturn would further limit available headroom for
\nUK Chancellor Reeves and likely see desks revise up their forecasts for the
\nongoing \u201cblack hole\u201d in the UK\u2019s finances. The implications for monetary policy
\nare likely less severe, with the MPC more biased to see how developments on the
\ninflation front turn out.<\/p>\n
Japanese GDP (Fri): <\/p>\n
Japanese GDP Y\/Y for Q2 is expected to print at -0.7% (prev. +2.2%
\nin Q1). Industrial production is expected at +1.7% for June (vs -0.1% in May).
\nJune Industrial Production is expected at +1.7% (prev. -0.1%). ING notes
\nexports weakened sharply in Q2, with inventories also dragging, though services
\nand private consumption have shown recovery. The BoJ\u2019s latest meeting kept
\nrates at 0.50% unanimously, reiterating readiness to hike if the economy and
\nprices track forecasts, but emphasising high trade-policy uncertainty. Governor
\nUeda, at the post-policy presser, said the Japan-US trade deal was \u201cgreat
\nprogress\u201d, reducing downside risks but with tariff impacts yet to fully emerge;
\nhe expects some negative effect in H2, though a tariff-driven economic
\nnose-dive now seems unlikely. Underlying inflation is seen stalling before
\ngradually re-accelerating, with achieving 2% \u201ccloser than before,\u201d and wage
\ngrowth expected to turn positive by year-end. There was also confusion
\nregarding the US-Japan trade deal, in which \u201ctariff stacking\u201d saw
\nmiscommunication, although on Friday, Japan’s trade negotiator Akazawa said
\nthat they have been able to confirm a non-stacking stance from the US, and
\nthere is no discrepancy between the US and Japan that there is no tariff
\nstacking.<\/p>\n
Chinese Activity Data (Fri): <\/p>\n
There are currently no central expectations for the Chinese
\nactivity data, although the trend is expected to show further moderation in
\neconomic activity. ING sees industrial production slowing to ~6.2% Y\/Y (prev.
\n6.5%), retail sales easing to 4.6% Y\/Y (as the boost from trade-in policies
\npeaks), and fixed asset investment holding near 2.8% Y\/Y YTD amid subdued
\nprivate sector participation. The data, however, is lagging and could prove to
\nbe stale, contingent on the US-China tariff truce, which is set to expire on
\nAugust 12th. The truce is likely to be extended by 90 days, according to US
\nCommerce Secretary Lutnick on Thursday. That being said, participants should be
\ncognizant that there is a non-zero chance of no extension and a return to
\neye-watering tariffs.<\/p>\n
Us Retail Sales (Fri):<\/p>\n
Headline retail sales are expected to rise by +0.5% M\/M in July
\n(prev. +0.6%), with the ex-autos measure seen cooling to +0.2% M\/M (prev.
\n+0.5%). Retail sales in June rose more than expected, partly due to a surprise
\njump in auto sales. However, Pantheon Macroeconomics noted that the data was
\nflattered by this gain, despite falling unit sales and rising prices from
\ntariffs. Pantheon expects real retail spending to stagnate ahead, with Q3
\nconsumption likely to grow by less than 1%. Participants will be watching the
\nRetail Sales data to see if there is a slowdown in consumer spending, given the
\nrecent jobs report showed a weaker labour market than initially thought due to
\nthe chunky, downward two-month net revisions.<\/p>\n