The Week Ahead

US Inflation Data

It is anticipated that July's CPI data would demonstrate that inflation has kept trending towards the Federal Reserve's 2% annual objective.

Fears that the Fed has caused the economy to go into meltdown by keeping rates high for too long may be allayed by a reading that indicates merely a slight cooldown. However, a poor report might increase concerns about a recession and could cause further market volatility.

The weekly data on initial unemployment claims and retail sales figures for July are also included in the economic calendar.

Additionally, a number of Fed representatives will be available to speak with investors, including Presidents Raphael Bostic of the Atlanta Fed, Patrick Harker of the Philadelphia Fed, and Austan Goolsbee of the Chicago Fed.

UK Data

An abundance of economic data coming from the UK will influence the outlook for monetary policy in the coming months.

On Tuesday, wage growth data is scheduled to be released. The day after, inflation numbers are scheduled to be released, and both will be keenly monitored for signs of persistent pricing pressure, especially in the still-hot services sector.

It is anticipated that the economy will grow by 0.6% in the second quarter, but there will be very little growth in June according to monthly GDP figures that will be released on Thursday.

Retail sales figures, which will be released on Friday, are anticipated to increase in July following a decrease in June.

Earnings coming to an end

With most corporations having already released their quarterly financial results, earnings season is coming to an end.

However, a few noteworthy names, such as Walmart and Home Depot, are still scheduled to be reported in the upcoming week.

Given some recent indications of weakening in economic statistics, investors will be keen to hear what retailers have to say about the durability of consumer spending, a key engine of economic development.

Cisco Systems and Fox are two more notable names on the earnings schedule.

Volatility

Following last Monday's stock market plunge, which was brought on by a mix of worries about a U.S. recession and the closing of a worldwide yen-funded carry trade, investors are expected to stay on edge in the upcoming week.

As the markets recovered most of their losses by Friday's close, concerns about the state of the labour market were shown to be exaggerated, as evidenced by a larger-than-expected decline in unemployment claims on Thursday.

This next week, the main concerns will be whether the anticipated Fed rate cuts have been priced in or not, and how much longer the unwinding of global carry trades would take.

The forthcoming U.S. election and worries about the Middle East war intensifying make it doubtful that volatility will begin to ease anytime soon.

(Sources: investing.com, reuters.com)