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UK retail sales fall; survey flags weakness in spending will persist

Chris Scicluna
Emily Nicol
  • Japanese headline inflation eases slightly in June as fresh food prices drop and energy inflation was limited by policy measures
  • Japan’s flash PMIs surprise on the downside in July as supply constraints and higher cost burdens weigh

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BoJ maintains ultra-accommodative policy

Chris Scicluna
Emily Nicol
  • BoJ's Kuroda insists that higher rates or a wider target range for 10Y JGB yields are not under consideration despite revising up its inflation forecast over the horizon.
  • ECB set to raise key interest rates for the first time since 2011.
  • With Draghi set to resign as Prime Minister today, the collapse of Italy’s government is particularly ill-timed in light of ECB discussions on its new anti-fragmentation tool.

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UK CPI inflation rose to a new 40-year high

Chris Scicluna
Emily Nicol
  • German PPI remains extremely elevated, but there are hints that pipeline pressures might ease as long as natural gas flows resume
  • Euro area consumer confidence index likely to remain near its record low
  • Italian politics in focus as Draghi addresses the Senate this morning ahead of key confidence vote

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UK labour market remains tight despite a welcome drop in inactivity

Chris Scicluna
Emily Nicol
  • Updated euro area inflation numbers will likely confirm a record high rate in June
  • Euro area construction output probably made only modest recovery in May; the ECB’s latest bank lending survey will likely report a tightening of lending conditions 
  • US housing starts expected to have declined in June

 

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A big week for monetary policy

Chris Scicluna
Emily Nicol
  • The first ECB rate hike since the ill-fated tightening of 2011 expected on Thursday
  • Contrasting with the ECB, the BoJ Policy Board meeting is widely expected to see policy left unchanged
  • Data-wise, June CPI inflation figures are due from the euro area, UK and Japan

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