Economic Events to Watch This Week: A Global Perspective

Economic reports this week will provide key insights into inflation, employment, and monetary policy across China, the UK, the US, and the Eurozone. These indicators are expected to shape upcoming central bank decisions and offer a glimpse into the health of global markets.

Monday: China’s Inflation

China’s Consumer Price Index (CPI) is projected to rise by 0.7% year-over-year, slightly higher than 0.5% previously. The month-over-month rate is expected to remain steady at 0.5%. Despite these numbers, high real interest rates remain a challenge in China, where economic stimulus has been slower than anticipated.

Tuesday: UK Labour Market Report

The UK is forecast to add 114,000 jobs in the three months leading to July, compared to 97,000 in June. The unemployment rate is expected to drop to 4.1%, while average earnings growth is predicted to slow.

Wage growth with bonuses is expected at 4.1%, down from 4.5%, while excluding bonuses, it is expected at 5.1%. The Bank of England is unlikely to raise rates, with markets anticipating a 43 basis point cut by year-end.

Wednesday: US Inflation Data

The US CPI is expected to rise by 2.6% year-over-year, down from 2.9%. The monthly rate should remain at 0.2%, with Core CPI holding steady at 3.2%. Although inflation reports are important, the Federal Reserve’s focus has shifted toward the labour market, lessening the immediate impact of these figures on monetary policy decisions.

Thursday: ECB Rate Decision and US Jobless Claims

The European Central Bank is expected to cut its policy rate by 25 basis points to 3.50%, with more cuts likely to follow. President Lagarde may leave the option open for future adjustments based on data. In the US, Initial Jobless Claims are forecast at 230,000, with Continuing Claims expected to rise slightly to 1.85 million, signaling a steady labour market.

Friday: US Consumer Sentiment

The University of Michigan Consumer Sentiment Index is expected to rise slightly to 68.0, reflecting cautious optimism amid concerns over global economic growth.This week’s reports are crucial in offering a clearer picture of economic trends and potential central bank actions.

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