Economic Data and Earnings in Focus as ECB and US Inflation Reports Loom

The upcoming week is packed with significant economic data releases and corporate earnings announcements. The European Central Bank (ECB) will make its latest policy announcement, which is expected to raise interest rates by 25 basis points, bringing the deposit rate to 2.50%, in line with consensus and market pricing.

Danske Bank analysts believe that ECB President Lagarde will retain full optionality over the future rate path and provide no firm guidance, limiting the market reaction. The new staff projections are likely to send mixed signals, while scenarios for core inflation could prove dovish.

In the US, the consumer price index (CPI) for August is due, following a blowout non-farm payrolls report that showed the economy added 162,000 jobs in August, well above market expectations. This has nudged expectations of a September rate hike higher, but the final decision hangs on next Friday's inflation print.

Corporate earnings announcements will also be in focus, with results from Kroger and Adobe among those scheduled for release.