On Tuesday, attention will turn to Canada with the release of inflation data, while in the U.S. the focus will be on building permits and housing starts.
On Thursday, the spotlight shifts to the flash manufacturing and services PMIs for Australia, the eurozone, the U.K., and the U.S. In addition, the U.S. will publish existing home sales data.
Rounding out the week, Canada will release the m/m retail sales data on Friday.
Headline inflation is expected to remain at 1.9% y/y in July, unchanged from June, though underlying price pressures appear hotter. The removal of the carbon tax continues to weigh on headline figures, but tariffs, higher service costs, and steady consumer demand are keeping core measures elevated. Gasoline prices declined on both a monthly and annual basis, while food inflation, still affected by retaliatory tariffs, remains above 3%, according to RBC analysts.
The RBC analysts also emphasized that resilient household spending is a key driver of these firm underlying trends, with retail sales and card data pointing to continued strength. Given stable labor market conditions, ongoing fiscal support, and inflation holding within its target range, the BoC is likely to keep rates on hold.
Homebuilders continue to face challenges from sluggish single-family demand and excess supply, which has led to a sharp decline in single-family permits in recent months. In contrast, multifamily projects have been a bright spot, with June’s 30% surge in apartment starts offsetting weaker single-family activity and lifting total starts by 4.6%.
At this week’s meeting, the RBNZ is expected to deliver a 25 bps rate cut, bringing the policy rate down to 3.0% and resuming its easing cycle.
Recent economic data also support the case for a rate cut. Q2 CPI rose 2.7% y/y but came in below forecasts, with underlying measures continuing to ease. Labor market data was also weak, showing higher unemployment, modest wage growth, and a slight decline in employment. These signals point to cooling domestic momentum.
In the U.K., the consensus for CPI y/y is 3.7% vs 3.6% prior, while the core CPI y/y is expected to remain unchanged at 3.7%. Reasons for the expected uptick are higher food costs and a temporary rise in hotel prices tied to major events such as concerts, which will offset the lower household energy bills. The pickup in services inflation is likely to be short-lived, making the headline figure a less reliable signal for policy direction.
This week’s eurozone PMIs will be closely watched as the first major gauge of economic sentiment following the late-July trade agreement with the U.S., which will impose a 15% tariff on most EU exports. Consensus expects both manufacturing and services activity to soften slightly in August, with the composite PMI projected at 50.6, consistent with sluggish but still positive economic growth.
In the U.S., the consensus for existing home sales is 3.92M vs prior 3.93M. High borrowing costs continue to weigh on housing activity, with existing home sales falling 2.7% in June to their weakest pace in ten months.
Although the dip in mortgage rates in early August may offer some relief, it will not be reflected in the July data, where sales are expected to ease another 0.5% to 3.91M annualized, Wells Fargo analysts said.
The advance estimate for June points to a 1.6% rise in retail sales, partly driven by a 2.2% rebound in auto prices. Gas station sales are expected to remain stable, reflecting little change in fuel costs. Excluding autos and gasoline, core retail sales are estimated to have grown by nearly 2%, suggesting that underlying consumer demand remains resilient, according to RBC analysts.
The Jackson Hole Symposium is typically a highly anticipated event for traders, and this year’s will be the last with Chair Powell, allowing him to reflect on lessons from his time leading the Fed. The 2025 framework review is less about rewriting Fed doctrine and more about formalizing what is already in practice: A symmetric 2% inflation target and a balanced focus on employment. While markets should not expect immediate policy shifts, Powell’s farewell message at Jackson Hole will help set the intellectual tone for the Fed’s next chapter.
This article was written by Gina Constantin at investinglive.com.Hence then, the article about market outlook for the week of 18th 22nd august was published today ( ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
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