Nicholas Glinsman | July 10th, 2022


July 10th, 2022

US inflation data in the coming week may stiffen the resolve of Federal Reserve policy makers to proceed with another big boost in interest rates later this month. CPI probably rose nearly 9% in June from a year earlier, a fresh four-decade high, based the Bloomberg consensus. Compared with May, the CPI is seen rising 1.1%, marking the third month in four with an increase of at least 1%.

While persistently high and broad-based inflation is seen persuading Fed officials to raise their benchmark rate 75 basis points for a second consecutive meeting on July 27, recession concerns are mounting. There are signs, though, that price pressures at the producer level are stabilizing as commodities costs — including energy — retreat. Nonetheless, the inflation data are likely to draw heightened scrutiny globally after a faster-than-consensus result for May caused ructions in financial markets.

Figures on producer prices, industrial production and consumer sentiment, as well as the Fed’s Beige Book, are also released in the coming week. Regional Fed presidents Thomas Barkin and Raphael Bostic will discuss the economy and monetary policy at separate engagements.

North of the border in Canada, in a precursor to the sort of decision the Fed is facing, the Bank of Canada will accelerate hiking with a rate increase of 75 basis points, if investor bets are to be believed.

Elsewhere, the shaky economic backdrop is likely to focus the finance ministers and central bankers from the Group of 20 meeting in the Indonesian resort of Bali starting on Friday. Senior officials are set to discuss the latest on inflation, global risks, the war in Ukraine, and debt. 

Meanwhile, global monetary tightening is likely to continue in earnest: aside from Canada, policy makers in Chile, New Zealand and South Korea may all deliver rate hikes of at least 50 basis points. 


The Reserve Bank of New Zealand and the Bank of Korea meet Wednesday, with further major rate hikes expected in an attempt to tame inflation. Investors will watch how those forerunners of global monetary tightening communicate further action going ahead.

South Korea’s jobless data will come out the same day, while Australia’s employment report will be released Thursday, giving insight into the state of the economy in the second quarter. 

Australia’s Labor Supply Accelerates as Migration Resumes

Earlier in the week, US Treasury Secretary Janet Yellen is expected to meet with Japanese Finance Minister Shunichi Suzuki ahead of the G-20 meetings in Indonesia. 

China is set for a bumper week of economic data that may shape the outlook for monetary and fiscal policy for the rest of the year. 

China External Trade

Trade data on Wednesday will give more clues about softening global demand, ahead of Friday’s GDP figures, which are under more scrutiny as Covid outbreaks persist. 

China GDP, Industrial Production and Service Index

Fiscal data during the week will show the state of local government finances, while credit figures will be watched for signs of improving business and household sentiment.


ECB policy makers have until Wednesday to air views in public about their July 21 meeting before a pre-decision blackout kicks in. They’re preparing to start raising rates, and to unveil an accompanying crisis tool to mitigate the fallout on weaker euro members such as Italy. President Christine Lagarde will attend a meeting of euro-area finance ministers at the start of the week, though few other appearances are scheduled. Likely to focus their minds is a temporary closure of the Nord Stream gas pipeline from Russia to take effect on Monday. German officials fear the shutdown for 10 days of routine maintenance may become permanent. 

Among data due, euro-zone industrial production on Wednesday will probably signal slowing expansion as the second quarter progressed, while the state of the region’s worsening trade deficit — perhaps reflected in the euro’s drop to a two-decade low — will be revealed on Friday.

“There are stagflationary winds blowing — there’s no question about that,” ECB Governing Council member Yannis Stournaras stated in an interview yesterday, stressing that Europe isn’t seeing stagflation yet. “But for the moment we don’t expect negative growth this year or next year.”

In the UK, consensus expectations for gross domestic product is for it to have barely increased in May after a decline the previous month, in figures due on Wednesday. 

That picture of anaemic growth amid rampant inflation is confronting Bank of England Governor Andrew Bailey, who’ll deliver a speech on Tuesday. A sickly economy will also greet the successor to Prime Minister Boris Johnson as the process of replacing him begins in earnest. 

Elsewhere around Europe, consumer-price data for June will underscore the cost-of-living shock reverberating around the continent, albeit unevenly. The Czech Republic’s inflation rate is already among the region’s highest, and it’s set to rise further, to above 17%. Lower but still hefty will be equivalent numbers in Scandinavia. Sweden’s price growth is likely to reach 8.3%, according to economists. 

Down south in Africa, data from Ghana on Wednesday will likely show inflation at almost triple the 10% ceiling of the central bank’s target, a possible impetus to raise rates for a third time this year. Nigerian data on Friday are expected to show inflation accelerated for a fifth month. A significant quickening might persuade policy makers to raise borrowing costs the following week.

Also on Friday, Israeli data may show inflation remaining stubbornly above the government’s 1% to 3% target.


In a light week for Brazil, weekly trade figures should feature more torrid export readings while May retail sales figures may build on better-than-expected April results.

Brazil Retail Sales and Confidence

With its economy likely slowing into a second-half recession as rising interest rates and double-digit inflation bite, Chile’s central bank is in a tight place. Most analysts look for an ninth straight hike, pushing the key rate to 9.5%.

In Mexico, a pick-up in headwinds — stubborn inflation, rising interest rates and less buoyant sentiment — argue for some slowing in the manufacturing and retail figures for May and June. 

Argentine inflation data due look to head higher from May’s 60.7%, which prompted the central bank to boost its key rate to 52%.

Peru posts June unemployment for the capital, Lima, and May economic activity, which declined for a third month in April. The economy is below its pre-pandemic level.

In Colombia, May data on manufacturing, industrial output and retail sales should underscore why analysts have been marking up their 2022 GDP forecasts. Amid a host of challenges, its economy is seen leading growth among the region’s big economies this year.