Fed’s Favorite Gauge Is Seen Showing Faster Inflation

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In China, the Loan Prime Rate fixing on Monday is expected to be unchanged, but remains an important signal given uneven demand and doubts over recovery strength.

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Several Asia-Pacific nations release inflation updates. Australia’s trimmed mean gauge of annual consumer-price growth for May is due Wednesday after the measure quickened to 3.4% in the previous month. Reserve Bank of Australia official Andrew Hauser speaks hours later. 

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Following national data for May, the Tokyo price gauge due on Friday for June is expected to show the impact of rising energy prices, though the underlying trend may be obscured by the impact from subsidies. 

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Singapore’s headline inflation due Tuesday is seen accelerating to 2% in May, while Hong Kong also releases CPI the same day.

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Japan’s policy communication will also be closely watched. BOJ Deputy Governor Ryozo Himino speaks Wednesday, the same day the BOJ releases its summary of opinions for the June meeting, where it raised rates to their highest in 31 years. Board member Naoki Tamura speaks on Thursday.

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Growth momentum will be tested through surveys. Japan’s flash PMIs will be watched for signs the recovery is broadening. A firmer manufacturing reading would reinforce the view that Asia’s export cycle is improving, while softer services would raise questions over domestic demand.

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India’s HSBC PMIs are among key releases. India has been the region’s standout growth story, so the issue is whether activity is still accelerating or settling at a strong pace, with services likely to matter most. India’s infrastructure output adds an industrial read.

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Taiwan export orders, labor-market figures and industrial production will help frame conditions for trade-sensitive economies. Japan services-price data, machine tool orders and its preliminary leading economic indicator will offer gauges of consumption and business investment.

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Australia labor-market data are due, while Thailand’s central bank decision Wednesday will be watched for how policymakers balance weak domestic demand against currency and external pressures.

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Europe, Middle East, Africa

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The UK will stay in the spotlight as speculation swirls over the leadership of Prime Minister Keir Starmer after the election of his prospective challenger Andy Burnham to parliament.

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Focus will also fall on the Bank of England, with three policymakers scheduled to appear following the decision to keep rates on hold last week in a split vote.  

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A glimpse of the cumulative impact of more than three months of energy disruption on companies will arrive with PMIs in both the UK and the euro zone on Tuesday. Small improvements on both of their composite measures are anticipated. 

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Elsewhere in the euro region, business confidence in France on Tuesday and the German Ifo gauge on Wednesday will be released. The ECB’s survey of inflation expectations on Friday will also be a highlight, given how officials there recently delivered the first Group of Seven rate increase after the outbreak of the Iran war.

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President Christine Lagarde will deliver testimony to the European Parliament on Monday, kicking off another busy week of policymaker events. 

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Turning to Sweden, on Wednesday the Riksbank will release minutes of its meeting last week, when officials kept borrowing costs unchanged but signaled a higher chance of a hike.

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It’s a quieter week than usual for central bank decisions: 

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