There is rarely a dull moment in markets and the week to come will be no exception, with make-or-break U.S. inflation data and tough questions over international financing for Ukraine – all against a backdrop of a fraught U.S. presidential race.
June’s personal consumption expenditures price index is expected to have climbed 0.1 per cent on a monthly basis, according to a Reuters poll. Investors will also be watching corporate results, as Tesla and Alphabet feature in a busy week for earnings.News that Donald Trump has chosen J.D. Vance as his running mate for November’s presidential election has reverberated particularly sharply in emerging markets and nowhere more so than Ukraine.
An acceleration in July’s inflation figures could feed expectations for further monetary policy tightening in the near term, though a slowdown would likely see those bets unwind and weigh on the yen. Key is net interest income – which banks have seen surge thanks to higher rates – as the European Central Bank looks to cut rates further and the Bank of England prepares to ease. Investors will also want to see how lenders are faring as political uncertainty intensifies – French bank shares fell sharply during recent elections.
Flash purchasing managers’ indices out on July 24 will show if the ECB’s challenge is getting any easier.