Global Markets Brace for Fresh Inflation Data and Central Bank Decisions
Investors head into the final days of September with a heavy data calendar and a wave of central bank commentary that could set the tone for markets into October.
In the U.S., attention turns to Friday’s release of the core personal consumption expenditures index – the Federal Reserve’s preferred inflation gauge. Economists expect price growth to ease slightly to 0.2% in August after a 0.3% rise in July, keeping the annual pace near 2.9%. The data may give policymakers more space to balance inflation risks against a slowing labor market, especially after the Fed cut interest rates last week for the first time this year.
Chair Jerome Powell, who described the current backdrop as “without risk-free paths,” will speak again Tuesday in Rhode Island alongside several Fed officials. Markets will watch closely to see if he reinforces the case for additional easing later this year as President Donald Trump’s tariffs continue to ripple through the economy.
U.S. Data and Regional Fallout
Alongside the inflation figures, Friday’s report will also provide updates on personal income and consumer spending. Analysts expect softer household demand, even as consumption remains the key engine of growth. Revised GDP data and fresh jobless claims are also due.
North of the border, Canada’s GDP numbers for July – and an advance read on August – will reveal how deeply U.S. tariffs have hit its economy after a 1.6% contraction in the second quarter. Bank of Canada Governor Tiff Macklem is scheduled to speak on the inflation outlook later in the week.
Asia in Focus
Asia’s week begins with South Korea’s early trade figures, a leading signal for global demand, followed by China’s loan prime rate decision. Australia and India will release PMI surveys, with India’s services sector remaining a bright spot despite global manufacturing weakness.
Later in the week, Japan reports retail sales and Tokyo inflation, key markers for the Bank of Japan as it weighs policy normalization. Singapore and Malaysia will post inflation and industrial output figures, while New Zealand’s consumer confidence update and China’s corporate earnings report round out the regional docket.
European and Emerging-Market Outlook
Europe faces its own busy week. Germany’s Ifo sentiment gauge and euro zone PMIs will provide a pulse check on business conditions, while France’s consumer confidence report will test nerves amid ongoing political turmoil.
Central banks will also be active. Sweden’s Riksbank may debate whether to trim its benchmark from 2% to 1.75% to aid growth, while Hungary and the Czech Republic are expected to hold steady. In Switzerland, officials meet Thursday to decide whether negative rates are back on the table – a move most economists doubt will happen given the risks for pension funds.
Across Africa, Nigeria is poised for its first rate cut since the pandemic as inflation cools, while Lesotho and Sierra Leone also weigh their options.
Latin America’s Next Moves
Brazil will release minutes from its latest meeting after holding rates at 15%. Policymakers will follow up with a quarterly monetary policy report on Thursday. Mexico, meanwhile, is widely expected to deliver its 10th consecutive rate cut, bringing borrowing costs down to 7.5% as inflation stabilizes within target bands.
Chile will publish minutes from its own meeting, with markets bracing for continued concern about stubborn core inflation. Argentina’s GDP proxy data for July is forecast to show a third straight monthly decline, highlighting the country’s ongoing struggle to regain momentum.
For global investors, the week ahead offers a snapshot of how the world economy is absorbing tariffs, inflation shifts, and political instability. With central banks in the U.S., Europe, Asia, and Latin America all signaling caution, the overriding question is whether the current slowdown can stay controlled – or if the cracks in growth will deepen as 2025 winds down.
Source: Bloomberg
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