Next week features important economic reports from the US, UK, China, Australia, Canada, and Japan. **Monday**: The 90-day EU Retaliation Pause ends, and trade data from India and China will be released. **Tuesday**: Chinese GDP, retail sales, and housing prices will be announced, alongside the OPEC Monthly Oil Market Report and German economic data. US and Canadian CPI figures will also be highlighted. **Wednesday**: The UK CPI is due, followed by US and Eurozone trade and production data. **Thursday**: Japan will release its trade figures, while Australia will announce employment data and the UK focuses on wage and unemployment stats. The Eurozone will finalize its Harmonized Index of Consumer Prices (HICP), and the US will share comprehensive economic reports, including retail sales and import/export prices. **Friday**: Japan’s CPI, German producer prices, and US housing reports will be released, along with the University of Michigan’s preliminary survey results. ### Chinese Economic Forecasts Chinese trade data for June remains uncertain but will reflect the recent 90-day US-China trade pause. Analysts expect China’s GDP for Q2 to grow by 5.1% year-over-year, with retail sales anticipated to exceed expectations. If housing prices keep falling, there may be calls for real estate stimulus. Canadian CPI could influence the Bank of Canada’s (BoC) easing expectations, with inflation showing slightly stronger trends than predicted. US CPI for June is estimated to rise by 0.3% month-over-month due to tariffs. The Federal Reserve remains cautious, and the market reflects this in its expectations for rate changes. UK CPI is projected to rise to 3.5% year-over-year, posing difficulties for the Monetary Policy Committee amid slow growth and a loosening labor market. Australian employment data is anticipated to show an increase in June after mixed recent results. UK unemployment is expected to hold steady, but there are concerns about data quality. Analysts foresee slower employment growth and softer wage figures in upcoming reports. US retail sales for June are expected to be stable following a previous decline, although discretionary spending has pulled back. Japanese CPI data follows a 3.7% increase in the core index for May. While minor easing in inflation is expected due to government price caps, prices are likely to remain high. ### Impact on Market Positioning Looking at the busy week ahead, it’s clear that several major reports could influence short-term market positions. Each data release is part of a broader trend. Price movements have been proactive rather than just reactive. Key factors include inflation revisions, growth data, adjustments in policy, and labor indicators, all of which can affect short-term interest rate expectations. Watch for Chinese retail and GDP data early in the week, not just for target fulfillment but for how upside surprises or their absence impact commodities and materials. Strong domestic demand may ease fears of deflation, but real estate will be critical. Beijing tends to favor gradual adjustments over sweeping solutions, making the situation more volatile. Higher GDP numbers combined with weak property prices could lead to immediate market fluctuations. Turning to the US, the consumer inflation figures remain a highly watched event globally this month. Markets expect core prices to rise slightly, but what’s critical is the underlying details. If shelter costs remain high or if disinflation in goods increases, this could lead to a sudden reevaluation of policy expectations from Powell. Short-term options may see increased activity tied to this week’s events. In Canada, the Bank of Canada might need to reassess its easing timeline, as the path now seems less clear. Prices in specific sectors like shelter and services are steady. Trading will likely focus on short-term volatility, especially in markets sensitive to US-Canada differences. The UK report on Wednesday is significant, as incoming numbers may carry more weight than recent central bank statements. If prices rise, especially in core services, it would challenge dovish forecasts. Bailey’s cautious messaging contrasts with the employment data to follow, which may either confirm or contradict that stance. Strong wage growth, despite weaker hiring, complicates the central bank’s decisions, adding tension to market expectations. Australian data will present a similar challenge, as recent results have been inconsistent. A gain in employment may ease concerns, but the focus will be on full-time versus part-time contributions. Typically, positive surprises are adjusted in later revisions. Traders will monitor shifts related to term structure movements, particularly in cross-currency markets. Japan’s CPI continues to impact yield expectations. Although price caps are exerting downward pressure, core inflation remains above the Bank of Japan’s comfort level, creating a mix of stability and potential hawkishness. While immediate changes in policy seem unlikely, rising costs of inaction are a growing concern. For now, price expectations remain stable, but another month of strong data could renew speculation. Later in the week, US retail data offers insights into consumer resilience in a tighter credit environment. While a flat print may not evoke strong market reactions, shifts in discretionary spending could influence positioning for personal spending in Q3. Preliminary sentiment results will also be important, as they link consumer expectations to inflation concerns, a top priority for policymakers. As German inflation and producer prices close out the week, we’ll assess input costs for early signs of pent-up inflation in Europe’s industrial sector. FX traders should consider how these revisions affect broader eurozone rate settings. Softer German figures often disproportionately impact near-term bund yields and risk perceptions in euro-linked trades. **Prepare for these events by staying nimble, as implied volatility is low across various macro pairs. With uncertainty in real estate and employment, we believe short maturity positions and tight strike spreads are best suited for this week’s asymmetric risks.** Create your live VT Markets account and start trading now.

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