FX Weekly: Trive’s Week Ahead Views
This week highlights include highlights include US PCE, Australian and Tokyo CPI, minutes from the ECB and RBA, as well as Canada GDP and the PBoC MLF.
Monday
The week opens with the People’s Bank of China leaving its one-year Loan Prime Rate at 3.00% and five-year at 3.50% for a third consecutive month, exactly as markets expected. The hold underscores policymakers’ preference for targeted tools over broad rate cuts, even as weak factory output, sluggish retail sales, and low loan growth highlight persistent demand-side fragility. To provide liquidity, the PBoC announced a CNY 600bln injection via one-year MLF loans on August 25th. ING notes that rather than cutting short-term repo rates, Beijing is preparing structural support measures, such as new subsidies for consumer loans set to roll out in September. Markets remain cautious, interpreting the stance as a signal that deflationary and credit growth risks are being addressed incrementally rather than through sweeping easing. European trade is muted with London shut for the UK Summer Bank Holiday, while Germany’s Ifo survey will provide an early gauge of business confidence. Later in the day, the Chicago Fed National Activity Index will round out the US data slate.
Tuesday
Focus shifts to central bank records, starting with the Reserve Bank of Australia’s minutes from its August 11–12 meeting. The RBA unanimously delivered a 25bps cut to 3.60%, justifying the move on easing inflation and softer labour conditions, while reiterating that inflation should settle near the midpoint of its 2–3% target range. The accompanying Statement on Monetary Policy downgraded estimates for long-term productivity (0.7% vs 1.0%) and GDP growth (2.0% vs 2.25%), while Governor Bullock signalled scope for further easing if inflation continues to recede, though without ruling out back-to-back cuts. Traders will parse the minutes for hints of how flexible the board may be if global shocks intensify. Later in the session, the Riksbank minutes are due. The Swedish central bank held rates steady at 2.00% in August but left open “some probability” of another cut this year. Policymakers noted inflation was slightly above forecast, but likely from temporary factors, while growth remained weak. Danske Bank expects a cut could come as soon as September if inflation aligns with forecasts, while SEB suggests August’s data will be pivotal. Also on Tuesday, Hungary’s NBH announces its rate decision, while in the US, June’s Case-Shiller home price index will update housing market trends.
Wednesday
Markets turn to Australia’s July monthly CPI, where consensus looks for a 0.5% M/M rise, lifting annual inflation to 2.3% from 1.9%. June’s softer print was driven by an unexpected fall in electricity prices, though upside risks loom from higher power bills and the fading of rebates. The RBA’s own forecasts imply headline inflation will climb above 3% in the second half before moderating, while core pressures stay at the top end of target. A stronger CPI would dampen easing expectations, though markets currently price only a one-in-three chance of another cut by the end of September. Switzerland releases its August investor sentiment survey, while the corporate highlight is Nvidia’s earnings. The AI leader is expected to report Q2 EPS of USD 0.99 on USD 45.5bln in revenue, with Data Centre contributing over USD 40bln. KeyBanc anticipates strong results but cautious guidance given pending US export licenses and the White House plan to take 15% of China-related revenue. Excluding China, guidance could undershoot consensus, but supply growth for its Blackwell chips and a strong product cycle underpin expectations for a strong year ahead.
Thursday
The European Central Bank publishes its July meeting minutes, where the Governing Council unanimously kept the deposit rate unchanged at 2% and reiterated its data-dependent stance. Lagarde dismissed concerns over euro strength and stressed that policy is “in a good place,” suggesting little urgency to adjust despite tariff threats from Washington. Bund yields slipped after she emphasized that temporary undershoots in inflation would not sway the ECB from its medium-term target path. Markets expect a quiet set of minutes, but they will still be scanned for nuance around FX monitoring and the inflation trajectory. Elsewhere, Switzerland’s Q2 GDP is due alongside the Eurozone’s August sentiment survey. Across the Atlantic, the US releases its second estimate of Q2 GDP and the quarterly PCE price index, both key inputs into Fed thinking ahead of the September FOMC.
Friday
Asia opens with Tokyo’s August CPI, expected to slow to 2.6% Y/Y from 2.9% on lower energy prices, though “super-core” remains above 3%, sustaining pressure on the BoJ to normalize gradually. Japan also publishes July activity data, where industrial production is forecast at -1.2% M/M after a front-loaded June, while retail sales should benefit from firm wage growth. Germany releases July retail sales and August unemployment, while preliminary CPI from France and Spain will refine the Eurozone inflation picture. In North America, focus will be on US July PCE, with Pantheon estimating a +0.26% M/M rise that should lift the annual rate to 2.9% from 2.8%. Fed minutes recently showed concern that tariffs are adding to goods inflation, though some policymakers framed it as a one-time level shift rather than a trend. Markets currently price a 70% chance of a September rate cut. Canada reports Q2 GDP, where analysts expect a near-flat annualized print after weakness in exports, with softer inflation boosting rate cut bets into year-end. The week closes with the University of Michigan’s August sentiment survey, giving a final read on consumer confidence and inflation expectations.
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