Macroeconomics: The Week Ahead: 27-31 July 2026

The Week Ahead – Preview:

The new week brings month end and a packed schedule of data, events and earnings, with Fed, BoJ and BoE policy meetings topping the agenda, while advance Q2 GDP readings from the US and across the Eurozone are accompanied by inflation data in the Eurozone, Japan and Australia; US Personal Income & PCE, Durable Goods Orders and Consumer Confidence; China’s Politburo holds a key meeting that will likely outline measures to shore up domestic demand. Apple, Amazon, Meta, Microsoft and Samsung Electronics top the run of corporate earnings, with AI-related investments and debt issuance intentions in the spotlight, and Anglo American, Barclays, BASF, BMW, Chevron, Coca-Cola, Eni, ExxonMobil, Intesa Sanpaolo, Mercedes-Benz, Nomura, Rio Tinto, UBS and Vale likely to be among the other highlights. But all eyes will remain on the Persian Gulf, Red Sea and Black Sea, with tensions remaining very high, and the weekend pause after 13 days of US and Iranian attacks on the one hand perhaps giving cause for a shimmer of hope that diplomacy may again be getting some traction. But on the other hand, potentially signalling constraints due to low stocks of munitions. This leaves energy markets subject to high levels of volatility, and bond markets left with no choice but to price in higher inflation and, by extension, rate hike risks. Meanwhile, wildfires continue to burn in France and Spain (displacing more than 300K people), just as Europe faces another bout of very hot weather this coming week, while storms batter East Asia and Chile, and continue to form in the Pacific and Atlantic. It may be the summer holiday season in the northern hemisphere, but for those not headed to the beaches, it is time to buckle up for what will likely be a choppy ride for markets.

Central banks: The Fed, BoE and BoJ are all expected to hold rates this week, but their messaging on inflation risks and, by extension, rates will be under intense scrutiny.

The weaker than expected CPI data, and this Thursday’s expected dip in June PCE deflators, gives the Fed some breathing space on rates, even if there is an argument that the Fed might want to go early on rates given that the increasing proximity of the November mid-term elections puts it under some pressure. As we are aware, Mr Warsh is against forward guidance, but he will still be keen to brandish his inflation fighting credentials, and reprise the line that inflation is too high, though there is only so long that he can run with that without taking action, especially as markets are now fully discounting a September rate hike, and inflation is set to rebound sharply on the back of the energy price rises. Given the surge in energy prices, the likelihood that Thursday’s Q2 GDP will show stronger domestic demand and stable labour demand, it seems likely that there will be dissenting votes for a rate hike.

The BoE’s MPC also has the lower than expected CPI (2.6% y/y), as well as its Agents report indicating that supermarkets have lowered their food inflation expectations to a peak of 4-5% for this year, against a prior estimate of 6-7%, noting fragile demand has made passing on increased costs more challenging, which was also evident in the latest Decision Maker Panel survey showing 12-month inflation expectations dropping to 3.0% vs. June’s 3.3%. But CPI is set to rebound above 3.0% in Q3 due to the jump in fuel and household energy prices (perhaps even as high as 3.5%), and the likely deceptively strong June Retail Sales may prompt one or other MPC members (Mann?) to join Greene and Pill in voting for a rate hike, despite a sluggish labour market. The Monetary Policy Report will have updated forecasts, but with the energy price surge,  the new Burnham government likely to make further announcements on the economy, and the US again wielding tariff threats, it is likely that Beiley & Co will not put too much emphasis on them.

The BoJ is under increasing pressure to raise rates at a faster pace, above all but not only due to import price pressures from a very weak JPY and rising energy prices. While national CPI was below the BoJ’s 2.0% target on all measures, this week’s Tokyo CPI ex-Food & Energy is set to hit 2.0% and rise further in coming months, and the underlying rate is in the 2.5%-3.0% area, with a number of BoJ officials recently voicing concerns about a faster pass-through to business and consumer prices. In its April forecast, core CPI was seen above target for the next two years, only reaching 2.0% in 3 years, while core CPI ex-Energy was seen at 2.6% in the next 2 years before dropping back to 2.2%. It seems likely that these should be tweaked higher in this week’s forecast update, as will its GDP forecasts. It will doubtless stress the need for vigilance due to the JPY, Import and energy prices, and the need for further rate hikes. But given very intense govt pressure not to tighten monetary policy, it may eschew offering a clear signal that the pace of rate hikes needs to pick up from the current 6-month cadence, which will likely prompt a more concerted test of the USD/JPY 165 level.

U.S.A.: Durable Goods Orders are expected to post a rebound of 1.8% m/m after an aircraft-led slide of -4.5% m/m in May, but AI-related investment is likely to keep core measure at a robust 0.8% m/m after a jump of 1.4% in May. Durable Goods Shipments are seen up 0.5% m/m, and this, along with the Advance Goods Trade Balance, where the deficit is forecast to narrow modestly to $-100.0 Bln, may prompt some last-minute forecast adjustments for Thursday’s advance Q2 GDP. Ahead of the latter, Consumer Confidence is projected to make a modest further recovery to 92.2 from 91.2, but the focus will likely be on Inflation Expectations, which are likely to rebound due to the jump in gasoline prices, and the Labour Differential (Jobs Plentiful minus Hard to Get), which fell to 2.4 in June, the lowest level since February 2021. Thursday brings Q2 GDP and June Personal Income and PCE, with GDP SAAR seen unchanged vs. Q1 at 2.1%. However, the details will look very different to Q1 with Personal Consumption rebounding to 2.3% from a tepid 0.5% in Q1, continued strength in Equipment Spending close to, but slightly lower than Q1’s 15.8%, while Net Exports are likely to be a bigger drag, perhaps as much as 1.5 ppt, in part due to front loading ahead of the expiry of the Section 122 tariffs. June PCE deflators are expected to echo CPI in headline with a drop of -0.1% m/m, bringing the y/y rate down to 3.7% from 4.1%, but core posting a very average 0.2% m/m that would see y/y ease 0.1 ppt to a still very lofty 3.3%, and thus above target every month since March 2021. CS and FHFA House Prices, Q2 Employment Cost Index and final Michigan Sentiment are also scheduled for release.

Eurozone: Monday brings Germany’s Ifo Business Climate that is seen edging higher again to 86.0 from 85.6, though as with all recent surveys, data collection timing could be key, with later responses likely taking a hit from the recent jump in energy prices. But the focus will be on Thursday’s advance Q2 GDP readings, with Spain continuing to be the only bright light among the major economies and see sustaining the Q1 pace 0.6% q/q, while France is expected to avoid a recession at 0.1% q/q after Q1’s -0.1%, Germany seen slowing to 0.1% q/q from 0.3% and Italy flatlining q/q after Q1 0.3%, all of which is expected to see Eurozone GDP at 0.2% q/q 0.5% y/y. As ever, Ireland may well be the wild card, with a rebound from Q1’s -7.0% q/q expected. Friday brings Eurozone CPI, which is expected to rise 0.2% m/m, paced primarily by a sharp rise in petrol prices and bouncing the y/y rate back up to 2.8%. Airfares are likely to be a big wildcard; the assumption would be a sharp energy related rise, though the seasonal pattern for the past 3 years has seen rises of 13.0%-15.0%; per se, anything in that region would have little or no impact on the y/y rate. Perhaps as important is that there is expected to be little evidence of any second-round effects, with core CPI expected to be steady at 2.4% y/y. Nevertheless, the headline outturn would bolster the case for a September ECB rate hike.

There are 175 S&P 500 companies reporting this week, with worldwide corporate earnings highlights as compiled by Bloomberg News likely to include: AbbVie, ACS Actividades de Construccion & Servicios, Adani Enterprises, Adani Ports & Special Economic Zone,  Adidas, ADP, Advantest, Aena SME, Agnico Eagle Mines, Air Liquide, Air Products & Chemicals, Airbus, Alnylam Pharmaceuticals, Altria, Amazon, Ambev, Ameren, American Electric Power, American Tower, American Water Works, Amphenol, ANA, Anglo American, Anglogold Ashanti, Anheuser-Busch InBev, Aon, Apple, ArcelorMittal, Arch Capital Group, Ares Management, ARM Holdings, Arthur J. Gallagher, ASE Technology, Asian Paints, ASM International, AstraZeneca, AXA, BAE Systems, Bajaj Finance, Bajaj Finserv, Baker Hughes, Barclays, BASF, BBVA, BMW, Bharat Electronics, Biogen, Bloom Energy, Boeing, Boston Scientific, Bristol-Myers Squibb, British American Tobacco, Brookfield Infrastructure Partners, CaixaBank, Cameco, Canadian Pacific Kansas City, Canon, Carpenter Technology, Carrier Global, Carvana, Cboe Global Markets, CBRE, Celestica, Centene, CenterPoint Energy, Chevron, Chipotle Mexican Grill, Cigna, Cincinnati Financial, Coal India, Coca-Cola, Coinbase Global, Colgate-Palmolive, Corning, Corteva, Credit Agricole, CRH, Daiichi Sankyo, Danone, Delta Electronics, Denso, Deutsche Bank, Dexcom, Dominion Energy, Doosan Enerbility, Dr Ing hc F. Porsche, DTE Energy, East Japan Railway, Eaton, Ecolab, Edison International, Elite Material, Emcor, Emirates Telecommunications, Enbridge, Endesa, Enel, Engie, Eni, Entergy, Enterprise Products Partners, Equinix, Erste Group Bank, EssilorLuxottica, Eversource Energy, Exelon, Extra Space Storage, ExxonMobil, Fair Isaac, Fanuc, Ferrari, Ferrovial, FirstEnergy, Flex, Fomento Economico Mexicano, Ford Motor, Fortinet, Fortis Canada, Fujitsu, Garmin, GE HealthCare Technologies, General Dynamics, George Weston, Great-West Lifeco, GSK, Haleon, Hanwha Aerospace, Heidelberg Materials, Hermes International, Hershey, Hilton Worldwide, Hindustan Unilever, Hitachi, Hochtief, Holcim, Hongfa Technology, Hongkong Land Holdings, Hoya, Hubbell, Humana, ICE, Illinois Tool Works, Illumina, Imperial Oil, ING, Ingersoll Rand, Intact Financial, International Consolidated Airlines Group, Intesa Sanpaolo, Iqvia, ITC, Japan Exchange, Japan Tobacco, Johnson Controls International, Kering, Keyence, Kinross Gold, Kioxia, KKR, KLA, Komatsu, Kyocera, L’Oreal, L3Harris Technologies, Lam Research, Larsen & Toubro, Legrand, Leonardo, LG Energy Solution, Linde, Live Nation Entertainment, Lloyds Banking, Loblaw, London Stock Exchange Group, LPL Financial, LVMH Moet Hennessy Louis Vuitton, Mahindra & Mahindra, Martin Marietta Materials, Maruti Suzuki India, MasTec,  Mastercard, MediaTek, Mercedes-Benz, Meta Platforms, Mettler-Toledo International, Michelin, Microsoft, Mitsubishi Electric, Mizuho Financial, Mondelez International, Monolithic Power Systems, Murata Manufacturing, NatWest, NEC, Nomura Holdings, Nucor, NVent Electric, NXP Semiconductors, O’Reilly Automotive, Old Dominion Freight Line, Orange, Oriental Land, Otsuka, Paccar, Panasonic, Pembina Pipeline, Philips, Power Corp of Canada, PPG Industries, Procter & Gamble, Prysmian, Public Storage, Qualcomm, Quanta Services, Reckitt Benckiser, Reddit, Regeneron Pharmaceuticals, Renesas Electronics, Resona, Rio Tinto, Rivian Automotive, Robinhood Markets, Roblox, Rolls-Royce, Royal Caribbean Cruises, S&P Global, Safran, Saint-Gobain, Samsung C&T, Samsung Electro-Mechanics, Samsung Electronics, Sanofi, Saudi Telecom, Schneider Electric, Seagate Technology, Shell, Sherwin-Williams, Siemens Healthineers, Sika, Singapore Airlines, SK Hynix, Societe Generale, Sony Group, Southern, Standard Chartered, Starbucks, Strategy, Stryker, Sumitomo, Sumitomo Electric, Sumitomo Mitsui Financial, Sumitomo Mitsui Trust, Sun Pharmaceutical, T Rowe Price, Takeda Pharmaceutical, TC Energy, TDK, TechnipFMC, Teradyne, Teva Pharmaceutical, Tokyo Electron, Toyota Tsusho, Trane Technologies, UBS, UCB, Unilever, Unimicron Technology, United Microelectronics, Universal Music, UPS, Vale, Valero Energy, Ventas, Veolia Environnement, Verisk Analytics, Vertiv, Vici Properties, Vinci, Vingroup, Visa, Vulcan Materials, Waste Management, WEC Energy, Welltower, Willis Towers Watson, Xcel Energy, XPO, Xylem, Yageo, Yum China, Yum! Brands.