The Week Ahead - Up and Down

Global financial markets face a week of critical economic data and central bank policy decisions, with sentiment oscillating between AI-driven optimism and geopolitical tensions. In the United States, core CPI and retail sales figures remain central to the Federal Reserve’s outlook, which currently favors holding rates steady through 2027 despite potential price pressures from AI investment. European markets are monitoring the Norges Bank’s policy meeting, where a rate hold is anticipated following recent inflation surprises, alongside concerns that record-low Rhine water levels could disrupt industrial production. Meanwhile, Japan’s central bank is expected to signal a hawkish stance in upcoming minutes, supported by significant FX interventions to stabilize the yen. Across Asia, the Reserve Bank of Australia is projected to maintain its cash rate at 4.35% as policymakers balance persistent inflation against signs of a cooling housing market and limited spare capacity.