Week Ahead: Data dump, tariff talk and earnings

It’s a busy summer week with all manner of potentially highly impactful global macroeconomic indicators to influence central banks in the US, China, UK and Australia. Highlights Stateside include the latest CPI figures, plus a steer on the consumer with retail sales activity. Economists have long predicted a rise in inflation due to tariffs, so will we finally see some impact show up in the consumer prices data? The July, August and September CPI reports are expected to show a clear influence. This will in turn be important for the Fed, with the majority of officials very much in wait-and-see mode. This puts further pressure on Chair Powell, especially from President Trump, with much speculation recently about the policymaker’s position. This could grab a lot of headlines this week amid ongoing tariff chatter.

The Q2 earnings season begins in earnest over the next few days. About forty S&P500 firms release results and perhaps guidance with the latter depending on the firm. Banks will be in focus with JP Morgan, Citigroup, Bank of America, Goldman Sachs and Morgan Stanley all publishing their results this week, along with key names like Netflix and Amex. As always, key will be earnings relative to their expectations, which have been revised lower over time especially for energy and consumer discretionary stocks. How much faith will markets have in any guidance given, amid heightened uncertainty and prior suspension of guidance?

In Brief: major data releases of the week

Tuesday, 15 July 2025

– China data: Q2 GDP is expected to print three-tenths lower than the first quarter at 5.1%. There may be some tariff impact on industrial production, while retail sales accelerated to a one-year high in May.

– US CPI: Expectations are for the June headline to rise 0.3% m/m and 2.6% y/y. The core is seen at 0.3% m/m and 2.9% y/y. Surveys point to rising prices, but seasonal adjustment factors for core CPI have been low in June, and gasoline and food prices have been muted.  Most Fed officials have taken a cautious approach on the outlook for rates, given expectations that consumer prices are expected to rise towards the end of the year due to tariff effects. However, some (Bowman and Waller) have suggested that the tariff-induced price rises might be a one-off and would therefore allow officials to look at rate cuts as soon as the July meeting if inflation pressures remain contained. Money markets do not see this happening though traders still see two 25bps rate cuts priced for 2025.

Wednesday, 16 July 2025

– UK CPI: Analysts forecast the headline rising one-tenth to 3.5% and the core unchanged also at 3.5%. Services inflation is the critical figure and is expected to come in soft, though base effects in core goods could counteract that cooling. The data should give the BoE enough comfort to cuts rates again in August, which is well priced in by money markets. There’s around 52bps of loosening priced by this year.

Thursday,17 July 2025

– Australia Jobs: The Australian labour market is expected to show continued signs of resilience in June while the unemployment rate is expected to remain steady at 4.1%. Although the headline figure in May fell a surprising 2.5k, it was weighed down by a loss of 41K part-time jobs, and full-time positions were actually up by around 39K. This suggests underlying strength with jobs growth still robust beneath monthly volatility. The RBA is probably more sensitive to inflation than jobs, with the Q2 data out at the end of July.  

– UK Jobs: Unemployment is forecast to remain at 4.6%, though there are still reliability issues with this data. More important wage growth ex-bonuses is expected to cool to 5.3% from 5.6%. Base effects from lower wage settlements should be helpful in bringing down the data.

– US Retail Sales: Consensus forecast sales to be unchanged in June. The ex-autos measure is expected to rise 0.3%, up from the prior -0.3%. Lower vehicle sales and little change in seasonally adjusted gasoline prices may weigh.

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