CPI and Cisco Earnings Set to Steer Markets This Week

The coming week in financial markets is set to be dominated by key inflation readings from the US and Germany, as well as Cisco's highly anticipated earnings report.

On Wednesday, the US consumer price index (CPI) is expected to show that prices rose 0.2% in July, following a 0.4% decline in June. The annual inflation rate is projected to ease to 3.4% from 3.5%, while core CPI is forecast to increase 0.2% month-on-month after remaining unchanged in June.

The Nasdaq 100 has risen sharply over the past week, but could be particularly vulnerable around the CPI release. A hotter-than-expected reading might suggest that June's softer data was an anomaly rather than the beginning of a sustained trend, increasing pressure on the Federal Reserve to hike rates in September and weighing on risk assets.

In Germany, inflation accelerated sharply in July, with consumer prices rising 0.8% month-on-month and 2.8% year-on-year. Analysts forecast both measures to remain unchanged in the month's final reading, which could be a key factor in determining whether European Central Bank rate hikes are back on the table in September.