Week ahead: Key global inflation reports due

A series of consumer inflation reports from around the world will provide the latest snapshot of price pressures and what it means for central banks. Australian, Japanese and German CPI inflation reports come ahead of the US PCE index, the Fed’s preferred gauge, at the end of the week. Watch out for final US GDP figures and the latest PMI data from China, where growth has stalled somewhat after the reopening at the start of the year.

Here are the week’s key events:

Monday

With markets looking ahead to a batch of inflation reports later in the week it could be a cautious opening. A quite start to the week sees the focus on Germany, with the Ifo business climate report, Buba monthly report and import prices facing the Eurozone’s largest economy.

Tuesday

The first major inflation gauge arrives in the shape of BoJ core CPI numbers, which is followed later by Canada’s CPI estimates. US durable goods orders numbers for May will be a major focus after these unexpectedly rebounded in April, indicating the US may not be as close to recession as some fear. Look out for US new home sales, The Conference Board’s latest consumer confidence reading and the Richmond Fed’s manufacturing index.

Wednesday

Over to Australia for the latest CPI update. The reading will be important for steering market expectations for the Reserve Bank of Australia’s next move. Minutes for June 6th meeting showed the rate hike was a finely balanced decision and the RBA is still considering a pause.

Thursday

More inflation as we move to Germany’s preliminary CPI report. German producer price inflation declined to just 1%, its lowest since January 2021. Will Europe see consumer inflation normalise this year? Spain’s flash CPI numbers are also due up before the ECB’s latest economic bulletin. Later in the session we get the final Q1 GDP reading for the US. The Commerce Department is expected to confirm the US economy grew by 1.3% in the first quarter after revising its estimate up 0.2 percentage points. US weekly unemployment claims figures are also important after rising above 260,000 for the last two weeks.

Friday

More Japanese inflation with the closely watched Tokyo core CPI reading for June. Core-core inflation, which strips out fresh food and fuel costs, rose to 3.9% in May, the highest since 1982. Will sticky core inflation force the Bank of Japan to do anything? Chinese manufacturing and non-manufacturing PMIs are due, with signs of contraction in the world’s second-largest economy worrying investors. Finally, the big release of the week is the US core PCE inflation index, which four weeks ago edged higher to 4.7% from 4.6%. Markets know the Fed thinks it will need to hike again – but softer inflation might change the calculation.