This Week’s Focus
After a volatile Jackson Hole, attention turns back to hard data. Several key releases across the U.S., Eurozone, and Japan will shape whether the dovish narrative carries through into September or stalls.
We will watch:
U.S. GDP (second estimate) and Personal Spending for signs of cooling demand
Eurozone inflation flash (HICP) for confirmation of disinflation or sticky pressures
Japan Industrial Production and Retail Sales as the BoJ tests its normalization path
Central bank speeches as policymakers clarify post–Jackson Hole positioning
Here’s what matters — and why.
U.S. GDP & Personal Spending (Thu, Aug 28)
What’s at stake: The Fed avoided pre-committing at Jackson Hole. Growth and consumption data will determine if markets keep faith in a September cut.
Why it matters: Weak spending strengthens the dovish case; resilient consumption could push cuts toward Q4.
Market impact:
Soft data → weaker USD, equities supported, yields lower
Strong data → delay in cuts, dollar firmer, equities cautious
Eurozone Inflation Flash (Fri, Aug 29)
Forecast: Headline inflation ~2.3% YoY, core ~2.6%.
Why it matters: ECB policymakers signaled a pause in September, but inflation dynamics will guide the October/December path.
Market impact:
Softer HICP → increases odds of Q4 cut, euro under pressure
Sticky inflation → ECB delay, Bund yields rise, euro support
Japan Industrial Production & Retail Sales (Fri, Aug 29)
What’s at stake: The BoJ remains the global outlier, slowly unwinding ultra-loose policy. Local data are key to the pace of normalization.
Why it matters: Stronger demand bolsters the case for hikes; weakness keeps BoJ patient.
Market impact:
Strong data → firmer yen, tighter global carry
Weak data → yen under pressure, EM FX support
Central Bank Communications
Fed speakers: Do they reinforce Powell’s cautious dovish tilt or push back?
ECB officials: Any shift from September pause toward Q4 easing hints?
Expect bonds and FX to swing on tone shifts post–Jackson Hole.
What It Means for Markets
Equities: U.S. data and ECB inflation read are key risk drivers.
Bonds: Fed tone keeps volatility elevated across curves.
FX: USD path tied to data + Fed; euro reacts to HICP; yen to local prints.
Gold: Beneficiary of dovish lean, safe-haven if data weakens.
Why It Matters Now
2025 has been defined by policy pivots and geopolitical volatility. This week’s releases will either cement the shift toward easing — or expose fragility that forces central banks to hold back.
This free note frames the top events.
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