Fed Fights Inflation as Economic Data Points to Uneven Recovery

The upcoming week of July 27-31 is expected to be crucial for various economies and markets. On Monday, the FX market will remain relatively quiet due to the lack of significant events.

Tuesday's key releases include Japan's core CPI y/y and the US CB consumer confidence and Richmond manufacturing index. These numbers are anticipated to provide insights into inflationary pressures in both countries.

Australia's inflation data, scheduled for Wednesday, is expected to reveal a 0.2% rise in monthly CPI, with annual inflation remaining at 4.0%. The Middle East conflict has led to increased costs in various sectors, but the temporary fuel excise cut is forecasted to moderate quarterly inflation.

The US Federal Reserve (Fed) meeting on Wednesday will likely result in unchanged federal funds rates, allowing policymakers more time to assess economic data. However, rising oil prices pose a potential threat to inflationary pressures and could lead to further policy tightening.

Thursday's announcements from the Bank of England include its monetary policy decision, with expectations pointing towards unchanged interest rates at 3.75%. Similarly, in Canada, GDP m/m is expected to reveal a modest growth rate.

The week concludes with various releases on Friday, including Japan's Tokyo core CPI y/y and the US revised UoM consumer sentiment and inflation expectations.