Week Ahead: Fed, BoE & BoJ amid Big Tech earnings

It’s a busy week of risk events on the calendar with three major central bank meetings, while markets stress about increased Middle East tensions, crude oil hitting $100 and the implications of elevated energy prices for longer. That has seen bond yields rise sharply over the last week, with the widely watched 10-year US Treasury yield which is seen as a barometer of global borrowing costs, hit levels last seen in January 2025. Earnings season can also be added to the perfect storm for risk taking as four of the biggest tech companies on the planet (Meta, Microsoft, Apple and Amazon) report their latest results after the US close on Wednesday and Thursday.  

Does the Fed and new Chair Warsh shock markets with a 25bps rate hike? With inflation benign and the uncertainty around the Persian Gulf, it would seemingly take a lot of courage to raise rates, and central bankers usually do the easy thing, not the hard thing. But Warsh appears to be super keen to reestablish the Fed’s lost inflation fighting credibility. Indeed, orthodoxy also says that early rate hikes often allow for fewer hikes as policymakers are clamping down on prices pressures early and things never get out of hand.

Probably the least markets expect is a reinforcement of this vibe, which means cementing the 80%+ chance of a hike at the next FOMC meeting in September. The Dollar Index looks poised for an attack on this year’s June high at 101.80, with the midpoint of the 2025 top and 2026 bottom at 102.86 a target for bulls. That said, housing costs, weaker wage growth and tariff refunds are expected to cool inflation, though we will still need to see a return to dialogue in the Middle East and a de-escalation to prompt a reversal in energy prices and a shift in market pricing.

Regarding the Bank of England, MPC members have been deeply divided toward tightening prospects with the main message being one of patience as further information is gathered. Growth has been weak and a soft labour market points to some slack, while lower food and services inflation is welcome news for the hawks. But consensus expects a ‘hawkish hold’ with 16bps of rate hikes priced in for the next meeting in September. A combination of geopolitics and domestic political concerns, both generating a meaningful increase in UK government bond yields are threatening the UK’s overall fiscal situation.

Stocks markets will be awaiting the Big Tech earnings releases with some trepidation, as the tech-laden Nasdaq closed at 10-week lows. Arguably the key takeaway from Alphabet’s results was that free cash flow fell negative for the first time since it has been a public company. Sharply higher capex projections of around $200 billion saw the multi-trillion dollar stock fall 7.8% last week. It seems the tables have turned and now it is not enough to simply say ‘we are spending more’, as higher capex is now seen as a poisoned chalice unless earnings growth and returns are accelerating.

In Brief: Major Data Releases of the Week

Wednesday, 29 July 2026

Australia: Headline inflation is forecast at 0.7% m/m and the annual rate at 4%. The RBA watches the trimmed mean which is expected to rise 0.9% in Q1 with the annual pace at 3.7%. Some spillovers from the Middle East conflict are already appearing.   

FOMC Meeting: There’s around a one in three chance of a rate hike at Warsh’s second meeting and 38bps in total by year-end. Recent June inflation data came in cooler than estimates and job market figures were also softer than predicted. But $100 Brent crude keeps the pressure on with the spike causing much higher yields in recent days. A lack of any forward guidance and a brief statement and press conference are likely under the new boss.

Thursday, 30 July 2026

Bank of England Meeting: There’s roughly a one in five chance of a rate hike, with around 32bps priced in for November. The vote split may be 8-1 this time, with Mann switching from on hold. CPI remains sticky and above target, but domestically generated inflation is benign right now.

US Q2 GDP: Q2 growth is forecast to print two-tenths higher at 2.3%. Tech investment is likely to drive activity like in Q1, while the consumer remains under pressure on cautious discretionary spending. The Atlanta Fed’s nowcast sees a softer 1.7% annualised gain.

Friday, 31 July 2026

Bank of Japan Meeting: The bank is widely expected to keep its policy rate unchanged at 1%. With the economic and inflation outlook broadly evolving as expected, there seems to be little urgency for further policy normalisation at present.  

Eurozone Inflation: Consensus sees the headline ticking up one-tenth to 2.9%, and core remaining steady at 2.4%. Focus will be on the sharp rebound in energy prices through July and if any ex-energy metrics are impacted.