Inflation updates will be due from the US and China in the coming week alongside a series of Q2 GDP releases. Several Fed members will also be speaking over the course of next week while a monetary policy meeting will be held in the Philippines.
Attention turns to the July inflation updates across the world's largest economies, US and China, for an assessment of the price pressures at the start of Q3. July PMI showed the global economy sustaining strong growth, but supply constraints continued to grow at an unprecedented rate, dampening growth and pushing input cost inflation higher.
Besides supply constraints, July PMI data also alluded to the detrimental effects of the Delta variant spread. As global COVID-19 cases crossed the 200 million mark, the weakening economic data are a reminder that the pandemic remains the number one risk to economies in terms of both slower growth and inflation. Mainland China, which had initially been first-in/first-out from COVID-19, reported the highest number of local cases since January and saw new movement restrictions in place, speaking to the threat of the latest wave. The trend with global COVID-19 cases will be worth scrutinising in the coming weeks for potential further disruption to economic conditions.
Finally, a number of Q2 GDP data will also be released next week, including in the UK, where June PMI data showed signs of slowing growth despite easing of restrictions. Several Asian economies will likewise update Q2 GDP figures.
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