Weekly Global Economic Preview: Inflation, policy pivots, and growth signals set to dominate global agenda

This week, markets will closely monitor a slew of pivotal economic indicators poised to influence the trajectory of global monetary policy. In the United States, August’s inflation data takes center stage, with headline and core inflation remaining key drivers of policy expectations. The annual benchmark revisions to nonfarm payrolls will be dissected for deeper insights into labor market dynamics, while the University of Michigan consumer sentiment index will shed light on household confidence amid rising tariff pressures. These data points are expected to significantly shape the Federal Reserve’s strategy, particularly as a September rate cut appears increasingly priced in, though market attention now shifts toward the potential direction of policy into year-end.

Meanwhile, the European Central Bank is widely forecast to maintain its deposit rate at 2%, accompanied by refreshed macroeconomic projections. Investors will scrutinize any hints regarding the ECB’s stance on further tightening versus an emerging pause, amid subdued growth and inflation near target. Germany and France will publish critical industrial output and inflation figures, further informing eurozone health.

In Asia, China’s trade data will reflect a slowdown in both exports and imports, while deflationary pressures continue, with CPI and PPI showing contractions. Japan’s final Q2 GDP revision, alongside inflation and manufacturing surveys, will also command attention, while India’s inflation print will highlight domestic pricing pressures.

Overall, this week’s data deluge is likely to inject fresh volatility into global markets as investors grapple with the delicate balance between growth headwinds and persistent inflation, all amid mounting uncertainty over the future course of central bank policy.

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