Macroeconomics: The Day Ahead for 6 July 2026

ECB and Fed minutes: Both sets of minutes will be scanned for hints on the rate outlook, even as Warsh and, perhaps more surprisingly, Lagarde argued for less forward guidance at last week’s Sintra Forum on Central Banking. To a certain extent, both are now somewhat historical given the slide in oil prices back to pre-February 28 levels, though the sharp divergence between Oil and Gasoline prices does underline that energy pipeline pressures remain a real threat (see chart). Given a very terse Fed statement, the risk is that the FOMC minutes will also be less detailed, but they should at least offer some insights into how many FOMC members are shifting to the view that a rate hike will likely be necessary. While Lagarde has stuck to her signal of another rate hike (likely in September), as well as touting signs of greater growth resilience in the face of the energy price shock, other ECB speakers have been rather more ambivalent since the June 10/11 meeting, especially given the fall in June CPI. Elsewhere, only New Zealand’s RBNZ is expected to hike rates this week, predicated largely on the very close vote to hold at its May meeting, though the sharp fall in oil prices, and the fact that Q2 CPI will only be published on 20 July, with a forecast update due at its August meeting may possibly defer a rate hike to August. Rates are seen on hold in Egypt, Malaysia, Peru, Poland, Romania and Serbia, while the Bank of Israel is seen cutting rates 25 bps to 3.50%.

USA: Last week’s Payrolls were weaker than expected, but even with the net -74K downward revision to prior months, the 3-mth average at 111K remains above the Fed’s equilibrium (breakeven) rate of 80-100K, and the Fed must be somewhat alarmed by the sharp fall in the Labour Participation Rate over the past 9 months (see chart) to the lowest level since the start of the pandemic. Given that gasoline prices remain elevated, it will be interesting to see how much further easing there will be in the NY Fed’s 1-yr Inflation Expectations (last 3.46%). Trade Balance and Existing Home Sales will be the only other points of interest.

China: While CPI is expected to ease marginally to 1.1% y/y on a combination of continued falls in Food Prices, soft consumer goods inflation (on the back of weak demand) and the fall in energy prices, the consensus surprisingly sees PPI climbing to 4.2% y/y from 3.9%. While there is a modest adverse base effect (June 2025 PPI dropped to -3.6% y/y from -3.3% in May), the falls in energy, metals and agricultural prices (in some cases quite sharp) between May and June should more than offset this, with the risk of a quite sharp fall being substantial.

Germany: the inherently very volatile Factory Orders are expected to rebound 1.1% after sliding -3.8% in April, with the much anticipated support from federal government spending on Infrastructure and Defence proving to be weaker, and offset by demand destruction due to the Persian Gulf energy price shock, leaving the underlying trend no better than flat. April’s 0.4% m/m rebound in Industrial Production followed declines of -0.1%, -0.2%, -0.3% and -0.4%, with forecasters looking for a tepid 0.1% in May, which would imply a modest positive contribution from manufacturing to Q2 GDP, but this may be offset by weak consumer spending and business investment due to energy prices. A similarly weak picture is also anticipated from this week’s Trade data, with Exports seen dipping -0.4% m/m and Imports -0.8% m/m after a stronger than expected rebounds in April of 0.9% and 1.2% m/m respectively. As much as Chancellor Merz has been touting the recent coalition agreement on reforms to the pension system, fixed-term contract legislation and reducing red tape, and upscaling its Germany Fund into a strategic investment vehicle intended to attract more private capital, the proof of the pudding is in the eating, above all in terms of reducing very burdensome planning procedures. Scepticism remains justified.

Japan: The focus remains on PM Takaichi’s spending plans above all, given Japan’s very strained fiscal position, and on the fate of the JPY above all due to the BoJ remaining well behind the curve on rates relative to underlying inflation. Per se, this week’s Labour Cash Earnings, seen easing 0.2 ppt to 3.4% y/y in nominal terms and to 1.8% in real terms mostly due to calendar effects from fewer working days in May 2026 relative to May 2025, will likely have little material impact. Of greater concern should be Household Spending, which has been negative in y/y terms for the past 5 months, and is expected to have fallen -2.3% y/y in May, though that will be heavily exaggerated by base effects given a transitory surge in May 2025 of 4.7% y/y.

Commodities/Energy: monthly reports for the Oil sector from the US EIA and the IEA, and a host of Agricultural S&D reports in the US (WASDE), China (CASDE), Brazil (Unica Sugar), Malaysia (MPOB) and Australia (Grain Industry Association of Western Australia) will make for a busy week. They are accompanied by the International Gas Union’s webinar on its latest World LNG Report, Shanghai Platinum Week and Asia Climate Week conferences.

There is just one S&P 500 company reporting this week, with worldwide corporate earnings highlights as compiled by Bloomberg News likely to include: Asahi Group, Delta Air Lines, Fast Retailing, Nanya Technology, PepsiCo, Qatar National Bank QPSC, Seven & I, Tata Consultancy Services and Yaskawa Electric.