Next Week Preview: Markets Focus on Central Bank Decisions, Iran Situation, and Triple Tests from Economic Data

1. Next week, the global financial markets will face a series of key events, including policy decisions from the Federal Reserve, Bank of England, and Bank of Japan, the ongoing escalation of the US-Iran conflict, a flurry of economic data releases, and technology sector earnings reports. These multiple interwoven factors are expected to dominate market trends.2. The Federal Reserve will announce its interest rate decision next Wednesday, with the market widely expecting the federal funds rate to remain unchanged at 3.50%-3.75%. Due to a 27% surge in oil prices this month intensifying inflation concerns, the market has priced in about a 44 basis point rate hike by year-end. Investors will closely follow the FOMC statement and Chair Walsh’s press conference for clues regarding the future policy path.3. On the economic data front, the US will release June durable goods orders, the July consumer confidence index, the preliminary Q2 GDP, June PCE price index and personal income and spending data, as well as the final July University of Michigan consumer sentiment index. These data points will provide the market with the latest assessment of economic resilience and inflation trends.4. The Bank of England is expected to keep rates unchanged at 3.75% next Thursday. With new Prime Minister Burnham’s spending plans raising concerns about the fiscal outlook, the voting breakdown and the monetary policy report will be closely watched, and the market has priced in a potential rate hike in November.5. The Bank of Japan is expected to keep the rate unchanged at 1% next Friday, but the quarterly outlook report and press conference will be the focus. The continued weakness of the yen and rising household inflation expectations provide justification for a further rate hike. Key data releases include June unemployment rate, industrial production, retail sales, and July Tokyo CPI.6. The Eurozone will see a barrage of data, including preliminary Q2 GDP, the July economic sentiment index, HICP flash estimates, and the June unemployment rate. Germany will release the Ifo business climate index, preliminary Q2 GDP, and July inflation data. The market will assess the resilience of the European economy under the energy shock.7. China will release June industrial profits next Monday and the official July PMI on Friday. The Politburo meeting at the end of the month addressing policies for the second half of the year will be a key market focus.8. Australia will publish its Q2 CPI next Wednesday, providing key guidance for the Reserve Bank of Australia’s policy outlook. Canada will release May GDP and minutes from the Bank of Canada’s July meeting, while New Zealand will announce business and consumer confidence surveys, offering references for the next actions of each central bank.