Week Ahead – Rate hikes keep coming

Barring the obvious exception

We may have entered into a typically slower time of year for financial markets but as last week showed, there really is no such thing in 2022 and I expect next week to be no different.

In fact, there are a number of headline events that will grab everyone’s attention, not least the FOMC minutes on Wednesday. While we know the Fed has shifted to data-dependency, the minutes could hold further clues as to the balance on the committee. Of course, a lot of data falls between the July and September meetings – including two inflation and jobs reports – which could make those views less relevant but there’s always scope for a surprise.

There are a number of interest rate decisions next week and unsurprisingly, the bulk will likely involve a large rate hike. The outlier is obviously the CBRT which continues to be driven by unorthodox views on the link between inflation and interest rates, much to the misfortune of all those experiencing nearly 80% inflation as a result.

Fed minutes eyed after data-dependent shift

Has stagflation arrived in the UK?

RBNZ to continue aggressive tightening


Two reports showed US inflation is slowing and that has tilted the scales for traders in pricing in a slightly less aggressive Fed in September. Wall Street will now look for some guidance hints from the release of the FOMC minutes. The Fed has signalled that guidance wouldn’t be transparent going forward, so we will probably just have mostly reiterations of their data dependence.  It might take another cooler-than-expected inflation report before the Fed can admit that they are ready to consider slowing down hikes.    

The other important data set for the week is the July retail sales report which should show the consumer is weakening. Traders will also look to see if jobless claims continue to trend higher and if the labour market is showing any signs of becoming less tight.     

Fed speak will include appearances during the week from the Fed’s George and Kashkari.  

Election season continues with US primary elections in Alaska and Wyoming.  


Another quiet week is in store for Europe, with mostly tier two and three data being released. The standout here is the final inflation reading as traders assess interest rate expectations for September. No change is expected but of course, it could surprise. 

As will remain the case over the winter, the focus will remain on the energy market and supplies of Russian gas and oil.


The UK is heading for a long period of stagflation, with the BoE forecasting five quarters of contraction from Q4 this year while inflation remains high and interest rates rise. That’s on top of the contraction in the second quarter that was confirmed on Friday. Next week offers labour market, inflation and retail sales data which could provide additional insight into how bad the situation already is. 


PPI inflation is the only release of note next week. The central bank has been aggressively easing in recent months to support the economy and soften the rouble which remains around 20% higher against the dollar since the invasion. The PPI data is unlikely to alter the CBRs course.

South Africa

Another quiet week with retail sales on Wednesday the only notable release. 


At the risk of sounding repetitive, inflation was almost 80% last month and the CBRT next week is expected to leave the repo rate unchanged at 14% as it continues to cling to its misguided views on inflation and interest rates. 


Data highlights next week include PPI on Monday, trade on Thursday and industrial production on Friday. Inflation is running at 3.4% so a 50 basis point hike could be on the cards when the SNB meets next month. Assuming it waits that long, of course. It does love a surprise.


On Monday, China releases July retail sales, which are expected to rise to 4.2%, up from 3.1% in June. Investment and industrial production are also expected to accelerate, pointing to a strengthening recovery. Exports have increased but the strict zero-Covid policy has dampened domestic consumption.

The People’s Bank of China sets its one-year medium-term lending facility rate this week. The central bank is expected to maintain the rate at 2.85%, where it has been pegged since January. The MLF could be cut in the next month or two, with the PBOC having previously signalled its intent to do so due to weak household spending and a desire to scale back funding costs for domestic enterprises. But with inflation running close to 3%, alternative targeted measures may be preferred.


The highlight next week is WPI inflation on Tuesday. It is expected to drop back slightly to 14.2% which will be welcome following the 50 basis point rate hike from the RBI last week. Further hikes may be warranted in the coming months as the central bank tries to get inflation back below target.


On Tuesday, the RBA releases the minutes of its August meeting. The markets will be looking for insights into the RBA’s decision at the meeting to raise rates by 0.50%, bringing the cash rate to 1.85%.

Australia publishes employment change on Thursday. The labour market is expected to decelerate in July and post gains of 40,000. This follows the June gain of 88,400, which was higher than expected. The unemployment rate is expected to remain steady at 3.5%.

New Zealand

The Reserve Bank of New Zealand meets on Wednesday. The RBNZ has been at the forefront of aggressive rate hikes by central banks and is expected to raise the cash rate by 50 basis points to 3.00%. This would mark a fourth successive 50bp increase, with further rate increases expected in the coming months. Along with the rate decision, the RBNZ will publish revised growth and inflation forecasts.


Japan releases its second-quarter GDP on Monday. A strong rebound of 2.6% YoY is expected, after a disappointing -0.5% release in Q1. The modest economic recovery has been driven by post-Covid domestic demand.

A stronger economy is also producing higher inflation, and we’ll get a look at July’s Core CPI on Friday. Core CPI is forecast to rise to 2.5%, up from 2.2% in June. This would push inflation further away from the Bank of Japan’s 2% target, but the central bank is unlikely to reduce stimulus until it is convinced that inflation is not transient.


No data or events next week.

Economic Calendar

Sunday, Aug. 14

Economic Data/Events

India trade

Saudi Aramco reports Q2 results

Monday, Aug. 15

Economic Data/Events

US cross-border investment, empire manufacturing

Canada existing home sales

China liquidity operations, retail sales, property prices, industrial production, surveyed jobless

Japan GDP, industrial production

New Zealand performance services index

Thailand GDP

German Chancellor Scholz meets Nordic leaders in Oslo

South Korea and North Korea celebrate Liberation Day, an annual holiday in both countries to mark their liberation in 1945 from 35 years of Japanese rule.

Assumption Day is observed in many European countries, including Spain, France and Switzerland. Some financial markets are closed.

Tuesday, Aug. 16

Economic Data/Events

US housing starts, industrial production

Australia household spending

Canada housing starts, CPI

Germany ZEW survey expectations

India wholesale prices

Israel GDP, CPI

Japan department store sales, tertiary index

Mexico international reserves

UK jobless claims, unemployment

Foreign Secretary Truss and former Chancellor Sunak hold campaign events

Alaska and Wyoming hold primary elections.

Wednesday, Aug. 17

Economic Data/Events

US FOMC minutes, business inventories, retail sales

Australia leading index, wage price index

Eurozone GDP

Hungary GDP

Japan machinery orders, trade

Singapore non-oil exports, electronic exports

South Africa retail sales


New Zealand PPI

RBNZ Rate Decision: Expected to raise rates by 50bps to 3.00%

RBNZ Governor Orr holds a news conference after the release of the central bank’s latest monetary policy statement

EIA crude oil inventory report

Thursday, Aug. 18

Economic Data/Events

US existing home sales, initial jobless claims, Conference Board leading index

Australia unemployment

China SWIFT global payments

Eurozone CPI

New Zealand trade

Norway GDP

Norway rate decision: Expected to raise rates by 50bps to 1.75%

Thailand car sales

Turkey rate decision: Expected to keep rates steady at 14.00%

Kansas City Fed President George speaks on the economic outlook

Minneapolis Fed President Kashkari speaks  

Friday, Aug. 19

Economic Data/Events

New Zealand trade

Canada retail sales

Japan CPI

New Zealand credit card spending

Thailand forward contracts, foreign reserves

Sovereign Rating Updates

Iceland (Moody’s)

Cyprus (Moody’s)

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam