Below are the most important global events likely to affect FX and bond markets in the week starting July 13.
U.S. inflation figures will mark the key economic data release as investors assess when and whether the Federal Reserve could raise interest rates.
Investors will meanwhile watch developments in the Middle East closely and the consequences for oil prices.
U.S. President Trump recently declared the U.S.-Iran ceasefire to be over while the U.S. and Iran have exchanged fire. Oil prices rose, pushing bond yields higher as a result, but markets have since calmed as investors remain optimistic that talks between the two countries will continue.
Asia faces a busy week of economic data, led by a closely-watched series of releases from China that will offer fresh clues on the health of the world's second-largest economy.
Interest-rate decisions are due from Canada and South Korea.
U.S.
U.S. inflation data for June are due Tuesday and will be scoured by investors after last month's Federal Reserve meeting prompted markets to increase bets on interest rates rising.
In his first meeting as the Fed's chairman, Kevin Warsh emphasized a commitment to bring inflation back to the 2% target while the central bank's updated projections showed nine out of 18 officials anticipated higher rates this year, compared to none in March.
Warsh, however, has argued against providing forward guidance on likely future rate outcomes. This leaves investors focusing on data going forward.
U.S. money markets fully price a 25 basis-point rate increase in December, with a high chance of an earlier move in October, LSEG data show.
If the figures could show slowing inflation, especially core inflation, this could cause investors to scale back rate-hike expectations.
"Our forecast for core CPI to fall below 2.5% year-on-year by late summer would be an important sign that underlying inflation is still gradually easing, pricing out the chance of rate hikes altogether," Citi analysts said in a note.
Other data will give indications on the health of the U.S. economy, including June retail sales figures and weekly jobless claims on Thursday, and June industrial production and the University of Michigan July preliminary consumer survey on Friday.
Housing data include June pending home sales on Thursday and June housing starts on Friday.
Canada
The Bank of Canada announces its policy decision on Wednesday. Money markets price a 91% chance that rates will be left on hold at 2.25%, according to LSEG data.
The bar for a "hawkish turn" in favor of raising rates is high and the BOC is unlikely to deliver any surprises, ING analyst Francesco Pesole said in a note.
"Unless oil rallies back to April-May levels, the inflation outlook remains too benign [for the BOC] to hike, especially considering downside risks for jobs and activity related to [United States-Mexico-Canada Agreement] uncertainty."
Canadian existing home sales figures are due Wednesday and June housing starts Thursday.
Eurozone
Industrial production data for the eurozone for May will be released Wednesday, followed by eurozone May trade data on Thursday.
Final Spanish, Italian and eurozone inflation data for June are due on Wednesday, Thursday and Friday, respectively, while Spanish industrial orders and turnover for May are scheduled for Friday.
Allianz Research believes that the peak in inflation "should already be behind us," with oil flows normalizing and crude oil prices even falling back below prewar levels.
"The energy shock should prove short-lived, limiting second-round effects on broader inflation and avoiding a repeat of the 2022 surge."
Allianz expects the European Central Bank to stay on hold with the deposit rate at 2.25%, a level around neutral, after having already delivered one insurance hike in June.
The European Central Bank will release balance of payments data for May on Friday.
France has a public holiday for Bastille Day on Wednesday.
Germany will launch a new September 2028-dated Schatz at auction on Tuesday, while on Wednesday it will reopen 2052-, 2054- and 2056-dated Bunds.
Other issuers include the Netherlands on Tuesday, Greece on Wednesday, and Spain and France on Thursday.
U.K.
The monthly GDP estimate for May on Thursday will likely be the most watched item on the U.K. economic calendar. May industrial production data and May trade data are released on the same day.
The BRC-KPMG retail sales monitor for June, which measures U.K. consumer demand, will be published on Tuesday.
Bank of England Gov. Andrew Bailey and treasury chief Rachel Reeves are both due to speak at the Mansion House dinner in London on Tuesday.
U.K. politics will also be in focus. If, as expected, Andy Burnham is the only candidate to come forward as a potential successor to Prime Minister Keir Starmer--who recently announced his resignation--then he will be declared leader of the ruling Labour party on Friday. Burnham would then be formally appointed prime minister on July 20.
Scandinavia
Final Swedish inflation data for June are due on Wednesday.
Japan
Japan is scheduled to release May machinery-orders data on Wednesday, followed by the Bank of Japan's consumer-sentiment survey on Thursday.
The BOJ will conduct outright purchases in three segments of the Japanese government-bond market on Wednesday, including securities with maturities of more than one year and up to three years, as well as those exceeding 25 years. The purchases could support the domestic bond market.
The Ministry of Finance will auction about 700 billion yen of 20-year JGBs on Tuesday. The sale could attract investors seeking higher yields on super-long-dated debt.
While the 20-year yield is somewhat cheap relative to fair value implied by interest rate risk supply-demand conditions, investor demand will be in focus amid lingering headline risk, strategists at Barclays Securities Japan said.
Japan's Basic Policy on Economic and Fiscal Management and Reform is reportedly set to receive Cabinet approval in mid-July, raising the prospect of further fiscal-policy headlines, the strategists added.
China
China enters a busy week for economic data as investors assess the economy's health midway through the year. Attention remains focused on the Middle East conflict, rising trade tensions and an uneven economy marked by weak domestic demand and surging exports. The main event will be Wednesday's release of second-quarter gross domestic product and June activity data.
China's economy is expected to have grown 4.5% from a year earlier in the second quarter, slowing from 5.0% in the first quarter, according to a Wall Street Journal survey of economists.
ANZ Research economists attributed part of the slowdown to an extended spring holiday in April and May, which reduced the number of working days. Slower fiscal spending likely also weighed on growth as Beijing sought to preserve its fiscal buffer amid geopolitical uncertainty and energy-price shocks, they said.
June activity data will offer a clearer picture of current momentum. Retail sales are expected to have fallen 0.1%, improving from a 0.6% decline in May, according to the WSJ poll. ANZ said online sales during this year's 618 shopping festival were disappointing.
Fixed-asset investment is forecast to have contracted 5.0%, following a 4.1% decline in May. ANZ said slower fiscal spending and persistently weak property investment suggest the housing downturn remains a major drag on the economy.
Industrial output is expected to have grown 4.6%, slightly faster than May's 4.5% increase, helped by a rebound in production after extended holidays.
Investors will also watch Tuesday's trade data as tensions between China and the European Union over rising Chinese exports intensify.
Australia
The week ahead in both Australia and New Zealand will be largely devoid of major data. With school holidays in full swing, trading volumes also tend to thin out to a large degree.
Some minor improvement in the Westpac-Melbourne Institute consumer sentiment reading on Tuesday is expected, though sentiment levels overall are likely to remain depressed.
There will also be an update on business conditions from National Australia Bank Tuesday, with the focus likely to be on confidence and how firms are adapting to an improving inflation outlook as oil prices remain below the peaks seen in the war in the Middle East.
South Korea
The Bank of Korea will hold its rate-setting meeting on Thursday after Gov. Shin Hyun Song repeatedly signaled the need for tighter policy.
South Korea's economy continues to record strong growth, supported by semiconductor demand during the artificial-intelligence boom.
Bank of America analysts expect the central bank to raise its base rate by 25 basis points, starting a gradual tightening cycle. They noted that the Korean won recently touched a 17-year low against the dollar despite stronger verbal intervention by authorities.
The currency has also faced pressure from sizable foreign equity outflows as global investors rebalance their portfolios.
"Against this backdrop, policymakers are likely to place greater emphasis on exchange-rate stability and its implications for inflation and financial conditions," BofA analysts Benson Wu and Ting Him Ho said.
Singapore
Singapore will release its advance estimate of second-quarter gross domestic product on Tuesday. GDP growth likely slowed to 5.2% from a year earlier, from 6.0% in the first quarter, Goldman Sachs economists said. On a seasonally adjusted quarterly basis, they expect growth to remain steady at 1.0%.
The economy has been more resilient than Goldman initially expected, as the artificial intelligence-driven technology upturn has more than offset some of the effects of the Middle East conflict.
Singapore will also publish June nonoil domestic export data on Friday.
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