The upcoming week is busy with economic events, starting quietly on Monday with no significant news for the foreign exchange market. On Tuesday, we’ll see inflation data from Canada and the U.S., along with the Empire State manufacturing index from the U.S. Wednesday brings inflation figures from the U.K. and the U.S. will share core PPI m/m and PPI m/m data. On Thursday, Australia will release job market information, and the U.S. will report retail sales m/m and weekly unemployment claims. On Friday, Japan will announce its National Core CPI y/y, and the U.S. will provide initial figures for consumer sentiment and inflation expectations. Canada’s CPI m/m is expected to be 0.2%, with its median CPI y/y forecast to stay at 3.0%. In the U.S., the core CPI m/m projection is 0.3%, up from 0.1%. The headline CPI m/m is also expected to rise to 0.3%, compared to 0.1% before, with the CPI y/y forecast at 2.6%. The U.K. is predicting a steady CPI y/y at 3.4%, with core CPI y/y remaining at 3.5%. Australia’s job report is expected to show an increase of 20K to 30K jobs. For the U.S., core retail sales m/m should increase by 0.3%, bouncing back from a previous decline of -0.3%. Auto dealerships are showing early signs of recovery. As the week progresses, we need to pay close attention to how inflation data from North America performs. With U.S. headline and core consumer prices expected to almost triple month-on-month, this could shift the inflation narrative away from the Fed’s target. This might affect short-term rate expectations, which are sensitive to surprises. Last month’s softer data reassured markets, but any unexpected rise this week could challenge that comfort. Don’t overlook the Empire State manufacturing index. Although it often changes, it’s important for understanding broader industrial activity, especially in states with complex supply chains. A decline there, alongside steady inflation, could create a confusing situation that has become more common: persistent prices amid uneven growth. This mix is usually not favorable for fixed-income products and risk-sensitive strategies. On Wednesday, the U.K.’s inflation data could provide insights into the pound’s medium-term direction and help with near-dated pricing trades. If annual price growth remains steady, it may strengthen current expectations about the Bank of England’s policies. However, any change—up or down—could quickly impact short-term interest rates (STIR), potentially altering positions ahead of the next Monetary Policy Committee meeting. We’ll compare these figures against typical month-end supply and fiscal flows, as seasonal variations can distort intraday movements. Next up is Australia’s labor market. After some recent weakness, a rebound in job numbers is widely anticipated. Beyond the main figure, the participation rate and hours worked are essential too. If those improve along with job creation, AUD forwards might suggest a firmer interest rate trajectory soon. Wage expectations, which usually rise more slowly, might also begin to move higher, impacting rates against NZD and CAD. On Friday, Japan’s core CPI is expected, but it continues to struggle to meet the Bank of Japan’s long-term targets. It will be significant when considered alongside ongoing adjustments in JGB yields. Traders should keep a close eye on the timing of this release, especially given recent yen fluctuations. By week’s end, data on U.S. consumer sentiment and inflation expectations will complete our macro perspective. Sentiment data is essential as it can predict future consumer spending. Inflation expectations often signal future pricing behavior, particularly in services. Combined with the week’s earlier price data, this could provide valuable insights for positioning as we approach monthly flow adjustments. Changes in dealer hedging behavior typically occur here first and can lead to significant moves, especially during the low depth-of-book conditions often present around third Friday expirations. With retail sales expected to improve, any strength in auto-related data could enhance risk-reward ratios near mid-range targets. This is noteworthy, especially given the delay between strong sales and rising corporate input costs. For leverage-based strategies, the rate of improvement is more important than the headline number. Ultimately, we’ll be piecing together insights throughout the week, with each release contributing to the bigger picture. Focus on the sequence of data, not just the individual figures.

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