By Dow Jones Newswires staff

Below are the most important global events likely to affect FX and bond markets in the week starting Sept. 7.

Focus in the coming week will center firmly on U.S. inflation data as investors gauge whether the Federal Reserve could raise interest rates in the coming months, and possibly as early as this month.

In Europe, the European Central Bank is expected to raise interest rates again due to elevated energy prices.

In Asia, investors will focus on signals for the Bank of Japan’s rate path and Chinese trade and inflation data. Meanwhile, leaders from BRICS member and partner countries will gather as geopolitical tensions and strains on global trade intensify.

U.S.

U.S. consumer-price inflation data for August are due on Friday and will be keenly awaited in the wake of much stronger-than-expected U.S. jobs data for the same month.

The jobs data increased prospects of a rate increase at the Federal Reserve’s next meeting on Sept. 16. However, a rate hike this early is far from a done deal. U.S. money markets last priced in a 59% chance of a 25 basis-point rate rise this month and were fully pricing this in for December, LSEG data showed.

Much will depend on this upcoming inflation data, especially as Fed Chairman Kevin Warsh has recently stressed the need to bring down inflation.

On Thursday, Fed Gov. Christopher Waller said during a virtual event hosted by Reuters that he would support holding interest rates steady if August inflation data backed it up. Waller’s remarks came a day after Federal Reserve Bank of New York President John Williams indicated that data so far doesn’t warrant an increase in borrowing costs.

The comments prompted a reversal in yields on long-dated Treasurys and other developed-market sovereign bonds from multiyear highs.

Producer-price data for August, due one day earlier than the CPI data on Thursday, will also be closely watched.

“The prospect for a rate hike this month still depends much more on the August CPI and PPI data…but the strength in the labor market means we’ll only need to see data that are consistent with a moderately above-target-consistent gain in the core PCE deflator to shift our forecast back to a September hike,” said Stephen Brown, chief North America economist at Capital Economics, in a note.

Analysts at Danske Bank pointed out, however, that U.S. core inflation has been modest for the past couple of months.

Elsewhere, the University of Michigan’s flash consumer sentiment indicator for September on Friday will give an up-to-date indication of the health of the U.S. consumer. Weekly jobless claims data are due Thursday, followed on the same day by existing home sales data for August.

The Treasury will auction $58 billion in three-year notes on Tuesday, $39 billion in 10-year notes on Wednesday and $22 billion in 30-year bonds on Thursday.

Eurozone

The European Central Bank interest-rate decision is the week’s key event in the eurozone, where a 25-basis-point rate hike is widely expected and fully priced by markets, according to LSEG data.

“Such a move is more or less priced in, has been communicated relatively openly by several Governing Council members, and was also supported by the message from the monetary policy account of the July meeting,” Nordea’s chief analyst Jan von Gerich and chief economist Tuuli Koivu said in a note.

The main focus of the meeting will be on communication, “and here the data-dependent, no-precommitment ECB is likely to remain relatively tight-lipped,” they said.

“If tensions in the Middle East continue to escalate ahead of the meeting, and especially if gas prices remain on an upward trend, the message is still likely to have a hawkish flavour. ”

Data releases prior to the rate decision will include second-quarter eurozone GDP and employment on Monday, and German and French foreign trade data for July on Tuesday. Industrial output data for July are due from Germany on Monday, from France on Wednesday, and from Spain and Italy on Thursday. Final German CPI for August is due on Thursday.

Germany will auction February 2033- and May 2041-dated green Bunds on Tuesday and August 2036 conventional Bund on Wednesday. Other issuers are the Netherlands and Austria on Tuesday, Portugal on Wednesday and Italy on Thursday.

U.K.

U.K. Treasury Chief John Healey is due to deliver a key speech on Monday, according to media reports. Bank of England Governor Andrew Bailey is then scheduled to appear before parliament’s Treasury committee on Tuesday.

These events come after yields on U.K. 10-year and 30-year government bonds, known as gilts, recently rose to multiyear highs, intensifying concerns about weak public finances.

The RICS residential market survey for August, which monitors price trends, demand and sales across U.K. residential properties, is due to be published on Thursday. U.K. GDP data for July is due on Friday and comes after recent data have suggested the economy has remained relatively resilient.

The U.K. will sell a new May 2030 gilt on Thursday.

Scandinavia

Inflation data for August will be in focus in the coming week, with Swedish flash estimate consumer-price inflation data due Monday and Norwegian CPI inflation due Thursday.

SEB economists Olle Holmgren and Amanda Sundstrom noted that the Riksbank, Sweden’s central bank, has indicated that an early rate hike could hurt the economy’s recovery. It concluded that “the unexpectedly high inflation during the summer is driven by volatile travel prices, but also that uncertainty has increased and that it is important that monthly price changes slow during the late summer and autumn.”

SEB expects a rate hike in Sweden in March next year.

Swedish July GDP data are also due on Thursday.

Sweden and Norway will hold bond auctions on Wednesday.

Poland

Poland’s central bank will announce an interest-rate decision on Wednesday, when it is expected to leave its key interest rate unchanged at 3.75%.

“While National Bank of Poland Governor Adam Glapinski was surprisingly dovish at the July press conference–even raising the suggestion of a rate cut after the summer holiday–the rest of the Monetary Policy Council was more cautious,” ING analysts said in a note.

Given uncertainties regarding the inflation outlook and recent higher-than-expected inflation data for August, ING expects the main policy rate to remain unchanged for the rest of the year.

Switzerland

Switzerland will hold a bond auction on Wednesday.

Turkey

The Turkish central bank announces a rate decision on Thursday.

“The question of whether or not the easing cycle will restart in September will be a close call,” analysts at HSBC said in a note.

“We thought the governor’s remarks at the presentation of the third-quarter inflation report were somewhat dovish in tone,” they said.

The resumption of one-week repo auctions and the subsequent decline in the cost of funding also support HSBC’s view that a cut could be likely.

Japan

With markets almost fully pricing in a September interest-rate increase by the Bank of Japan, investors will look for clues about the pace of further moves in a speech by policy-board member Kazuyuki Masu on Thursday.

Policymakers have repeatedly said they will assess the effects of the Middle East conflict, currency swings and artificial-intelligence-related demand when deciding the timing and pace of rate increases.

“With markets increasingly focused on the outlook for Bank of Japan policy, we remain neutral on the Japanese yen and expect USDJPY to hover around 160 as authorities prioritize currency stability,” said Yuxuan Tang, Asia head of rates and FX strategy at J.P. Morgan Private Bank. That view assumes the BOJ raises rates three or four times over the next 12 months, taking its policy rate to around 2%, Tang said.

Japan’s second-quarter economic growth is likely to be revised higher Tuesday after capital spending proved stronger than initially estimated, economists say. Preliminary data released in August showed the economy grew 0.3% from the previous quarter and at an annualized rate of 1.1%.

July current-account figures and August bank-lending data are also due Tuesday.

Japan’s Ministry of Finance is scheduled to auction about 2.5 trillion yen of five-year government bonds Tuesday. Investors may remain cautious ahead of Masu’s speech.

China

China will release August trade and inflation data that are expected to show continued export strength and moderate price pressures.

Tuesday’s trade report will draw particular attention as frustration grows among China’s trading partners over its large export-driven surpluses.

ING economists expect exports to rise 24% from a year earlier and imports to increase 32%, producing a trade surplus of $107.0 billion. Citi forecasts a wider surplus of $119.1 billion, with exports up 27.5%.

Both expect consumer inflation to rise to between 0.8% and 0.9% from 0.5% in July, partly because of higher fuel prices. The decline in producer prices is expected to ease slightly.

Higher prices for food, gold, chips and AI-related products likely lifted both consumer and producer prices in August, though underlying consumer inflation remains weak, Nomura economists said.

Foreign-exchange reserves and money-supply data are also due.

Australia / New Zealand

In Australia, investors will focus on Tuesday’s remarks from Reserve Bank officials Sarah Hunter and Andrew Hauser for signals on interest rates. Consumer sentiment and the NAB business survey are also due that day, followed by consumer inflation expectations Thursday.

New Zealand will release business-finance data Tuesday and manufacturing activity Friday. Comments from central-bank Governor Anna Breman and Assistant Governor Karen Silk will also be closely watched.

India

India will host the 18th BRICS summit in New Delhi on Sept. 12-13, bringing together leaders from member and partner countries as well as invited nations.

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09-04-26 1056ET