Most traders may be out on the beach soaking up the mid-summer sun, but the relentless market and geopolitical newsflow continues for another week.
Following Friday's payrolls report, which was far more dovish than hawkish at face value, attention this week will be firmly on July US CPI (Wednesday), which could go a long way towards further tipping the balance for September FOMC pricing. Futures pricing fell by around 10 percentage points immediately after the release on Friday, leaving the implied probability at 44%. Then we get US PPI (Thursday), which is key for the components that feed directly into core PCE. Other US highlights include retail sales and the preliminary University of Michigan consumer sentiment survey (both Friday). Elsewhere, attention will focus on the RBA policy decision (tomorrow), the Norges Bank meeting and UK Q2 GDP report (Thursday), and inflation releases across Asia and Europe. Corporate earnings are quieter than in recent weeks but reports from Tencent, BYD, Cisco, Applied Materials and CoreWeave will still attract attention.
Before we go into the week ahead in more detail the situation in Iran remains finely balanced with Iran’s latest political and security moves suggesting that Tehran is trying to balance a tougher domestic posture with a continued search for a diplomatic off-ramp. The appointment of former Revolutionary Guard commander Mohsen Rezaee to head the Supreme National Security Council reinforces hard-line influence at the centre of decision-making, even as Iranian officials insist they are close to an agreement with Oman on a new shipping framework through the Strait of Hormuz. Foreign Minister Abbas Araghchi has described the talks as being in their final stages, but Tehran has stressed that any technical agreement on shipping routes would not by itself lead to a full re
