The European Central Bank meeting is the big macro event of next week, though UK inflation and jobs data will bring reflection on the next Bank of England move.
For the US, the big events are likely to be a speech from Fed Chair Jerome Powell on Monday and a host of others on Friday, retail sales on Tuesday, and building permits on Wednesday.
ECB
Economists and markets expect the ECB to keep rates on hold on Thursday so what they say will be the key thing.
Barclays predicted that Christine Lagarde and co are likely to characterise economic activity as softer than expected and inflation as broadly in line with forecasts.
The ECB governing council is “unlikely to formally signpost September for the next cut, but the press conference should signal that one would be possible with an unchanged outlook,” said Barclays economist Mariano Cena, adding that he expects a cut in September.
Whether or not the council signposts a September cut is “the main uncertainty for this meeting”, Cena said, judging that most members “would subscribe to at least delivering one more cut this year”.
UBS economist Reinhard Cluse said: “Crucial for the markets will be to find out how the ECB judges the overall disinflation process and what this suggests for the likelihood of a September rate cut.
“That said, we don't expect the ECB to pre-commit, but instead reiterate the data-dependent nature of upcoming interest rate decisions.”
By waiting until September, the council will have a lot more economic data to make its decision, including inflation, wages, real activity and sentiment, including two more inflation prints and Q2 national accounts data, Cluse added.
“Besides the evaluation of data, we expect next week's press conference to feature questions on the French elections and the potential ECB reaction to any volatility in sovereign bond markets, but we doubt President Lagarde will provide new insight.”
UK inflation and jobs
On Wednesday’s it is ‘prices day’ for the Office for National Statistics, with the June updates on the consumer prices index, plus retail, producer and other price indices.
A month ago, May figures showed UK inflation eased back to the BoE's 2% target for the first time since July 2021.
The headline CPI rate eased from 2.3% the month before as CPI rose 0.3% on a monthly basis, while core CPI, which excludes more volatile prices like food and fuel, was up 3.5%, softening from the 3.9% in the previous month.
For June, another low monthly CPI figure of around 0.2% or 0.3% will be good news for the BoE and could increase expectations of a an August or September rate cut.
Today, the market sees a 57% chance of a rate cut in August, with fewer than two rate cuts priced in for the year.
Services CPI, as it is closely followed by the BoE's monetary policy committee as a signifier for the persistence of inflation, will also be in focus, having eased less than expected to 5.7% in May from 5.9%.
On Thursday, wages will be in focus as well as other signs that the UK jobs market is cooling.
The unemployment rate is expected to remain at 4.4% for the three months to April, having risen from 4.2% over the past two updates.
Average weekly earnings rose 6.0%, or 5.9% excluding bonuses, with the figures for May expected to see an easing to 5.7% and 5.6% respectively.
Macroeconomic calendar for the week ahead
Monday 15 July
Industrial Production (EU)
Tuesday 16 July
Kantar Grocery Market Share (UK), Balance of Trade (EU), ZEW Survey (EU), Import and Export Price Indices (US), Retail Sales (US), Business Inventories (US)
Wednesday 17 July
Consumer Price Index (UK), Producer Price Index (UK), Retail Price Index (UK), Harmonised Index of Consumer Prices (EU), MBA Mortgage Applications (US), Building Permits (US), Housing Starts (US), Capacity Utilisation (US), Industrial Production (US), Crude Oil Inventories (US)
Thursday 18 July
Unemployment Rate (UK), Wage Growth (UK), Claimant Count Rate (UK), ECB Policy Decision (EU), Continuing Claims (US), Initial Jobless Claims (US), Philadelphia Fed Index (US), Existing Home Sales (US)
Friday 19 July
GFK Consumer Confidence (UK), Public Sector Net Borrowing (UK), Retail Sales (UK), Current Account (EU)