Market outlook for the week of 24th-28th August

The week starts off slow with no major economic events for the FX market scheduled for Monday. The following day, Japan will release the BoJ core CPI year-over-year, and the U.S. will publish consumer confidence and new home sales data. Wednesday will bring Australia's CPI data and U.S. releases including the core PCE price index month-over-month, preliminary GDP quarter-over-quarter, and durable goods orders month-over-month. Thursday features unemployment claims and the start of the Jackson Hole Economic Policy Symposium. On Friday, Japan will release Tokyo core CPI year-over-year, Canada will publish GDP month-over-month, and attention will turn to Fed Chair Kevin Warsh speaking at Jackson Hole. Another key release is the preliminary benchmark payroll revision for U.S. nonfarm payrolls. In Australia, the consensus for CPI month-over-month is 0.9%, down from -0.1%, with CPI year-over-year expected at 3.3% (down from 3.8%) and trimmed mean CPI month-over-month at 0.3%. Last month’s CPI data improved for the second month, with the trimmed mean rising to 3.6% annually. For July, a rebound in monthly inflation is expected, driven by holiday travel, higher fuel prices, and stronger domestic services costs post-minimum wage increase, though lower electricity prices will offset some of this. Inflation remains a concern, with renewed increases in input costs and selling prices. The RBA gained breathing room after June’s print, but inflation expectations have risen, keeping the possibility of a rate hike at the September meeting open if domestic demand remains resilient. In the U.S., the core PCE price index is expected at 0.2% month-over-month (up from 0.1%), with personal income and spending forecasts at 0.2% and 0.1% respectively. Consumer spending has shown resilience despite soft retail sales, with underlying demand positive. Personal income is expected to rise by 0.3% in July, and real disposable income should continue improving if labor conditions remain stable. Wells Fargo forecasts headline PCE to rise by 0.1% month-over-month, bringing the annual rate down to 3.6%, while core PCE is expected to increase by 0.2% month-over-month, remaining at 3.3% year-over-year. Recent CPI and PPI data suggests gradual moderation in underlying inflation pressures. In Canada, the consensus for GDP month-over-month is 0.2% (down from 0.3%), with Q2 growth tracking above a 3% annualized pace supported by stronger trade, consumer spending, business investment, and housing activity. Growth is expected to moderate in Q3, though early indicators remain positive. On Friday, attention will focus on the Jackson Hole Symposium, where Fed Chair Kevin Warsh may discuss broader policy framework questions. Recent softer labor market data, cooler inflation, and weaker retail sales figures have reduced urgency around policy moves. Traders will also monitor the preliminary payroll benchmark revision, with estimates pointing to a reduction of around 100K jobs, though March 2026 payroll levels could be revised higher. The Quarterly Census of Employment and Wages (QCEW) data has closely tracked published nonfarm payroll figures, though weak survey response rates and potential revisions remain uncertainties.