Week Ahead – Rate hikes galore

Fighting inflation

Next week offers a plethora of monetary policy meetings with the ECB, BoJ, CBRT, SARB and CBR among those. Central banks have mostly been racing to raise interest rates while watching official inflation data surpass their targets multiple times over. While those rate hikes will eventually bring inflation down, the economic cost is mounting.

The week ahead brings an interesting combination of those hiking aggressively, only just starting, not doing anything and one that has a bigger inflation problem than all of the others put together and that in the last year has cut the repo rate by 5%. It’s some mix.

The US is silent on the central bank front, with the blackout period that starts this weekend ahead of the Fed meeting on 26-27 July preventing policymakers from speaking publicly. Earnings season is underway though and there’s plenty of economic data which should keep us all busy.

Can earnings season ease recession fears?

Will the ECB opt for a turbo-charged lift-off?

Yen at risk of intervention as BoJ meets?


It will be a busy week filled with the conclusion of President Biden’s Mideast trip, economic data and earnings.  Wall Street will get a better handle on how quickly the economy is weakening and this might be the week that makes more traders price in a recession by the end of the year. Risk appetite will likely react to key earnings from Netflix, J&J, American Express, Bank of America, and Goldman Sachs. 

The housing market is cooling but this week’s data is expected to show signs that sales and housing starts are stabilizing. Traders will closely watch the preliminary July PMI readings that are getting dangerously close to showing manufacturing activity is contracting.  


It’s not hard to see what the highlight next week will be. The ECB will be hoping for some good news ahead of the meeting on Tuesday when the final inflation data is released. Unfortunately for the central bank, it likely won’t be forthcoming, meaning policymakers will be left to choose between a 25 basis point hike or a super-sized lift-off. Markets are pricing in the former but there is an outside chance of more. The week wraps up with flash PMIs on Friday.

Scheduled maintenance on Nord Stream 1 remains a major concern for Europe facing an energy crisis this winter, with some suggesting gas may not flow once completed, as planned. That would severely disrupt attempts to fill storage ahead of the winter and potentially lead to much higher prices and power cuts.


There is plenty of economic data to look forward to next week with labour market figures on Tuesday, inflation on Wednesday, and retail sales and PMIs on Friday. Among that, we’ll also hear from members of the MPC including Governor Andrew Bailey on Tuesday. 

This takes place against the backdrop of the race to be Conservative party leader and therefore Prime Minister. The impact on the markets has been minimal so far. 


The Russian central bank is expected to cut the key rate by 50 basis points to 9% next Friday, below the pre-invasion rate, but there is scope for a larger cut. A strong currency on the back of capital controls, strong commodity exports and weak imports has given the CBR room to cut the rate further in order to support the economy. As yet, it has done little to reverse the substantial appreciation in the rouble.

South Africa

The SARB will be hoping for a friendly CPI reading a day before its meeting next week although it will probably have little impact on the outcome. A 50 basis point rate hike is widely expected, bringing the repo rate to 5.25%, but it may be more aggressive with 75 possible. Inflation hit 6.5% in May and is expected to reach 7.2% in June, above its 3-6% target range.


Inflation hit 78.62% in June and the lira is back trading around the December and June lows. So naturally, the CBRT is widely expected to leave interest rates unchanged next week at 14%, insist the new model will work and blame everything else for the inflation mess. Capital controls remain the policy of choice and any deviation from that towards normality would come as a massive shock to the markets.


Very little of interest next week, with trade balance data the only release.


It is a lighter week for data next week in China, with just the one and five-year Loan Prime rate decisions on Wednesday. Any cuts would be very unexpected given the MTF was left unchanged this week. A surprise cut could be an immediate boost for local equities.

China equities remain under pressure amid concerns over financial stability as more Chinese citizens refuse to pay mortgages due to apartments being incomplete or late. That has added pressure to the already embattled property developer sector.

Elsewhere, zero-covid lockdown worries persist, while concerns are rising about new tech clampdowns after Alibaba management were called to meet the police over a one billion person data theft from a police database hosted on the Alibaba cloud.


No significant data in the week ahead. Foreign investors have continued to sell out of Sensex holdings heavily, weighing on the rupee. USD/INR remains near record highs as the current account deteriorates due to high energy prices and domestic export restrictions. The RBI appears to be intervening to cap USD/IDR near 80.00, but strong US data could see another bout of INR selling. The RBI may well be considering another unscheduled rate hike, which could be negative for equities.


The Australian dollar remains at the mercy of international investor sentiment flows, and it must now also contend with slumping iron ore and copper prices which are also capping local equities.

Impressive Australian employment data has put more and faster tightening by the RBA on the agenda for markets. The RBA minutes on Tuesday and Governor Lowes’ speech on Wednesday will be closely watched for signs that the central bank is moving to a more hawkish stance. That could be negative for equities.

New Zealand

New Zealand releases key inflation data on Monday. The data has upside risks and could edge market sentiment towards more and larger rate hikes by the RBNZ, in much the same fashion as the RBA. That could be negative for local equities.

The New Zealand dollar remains at the mercy of international investor sentiment flows.


Japan has a heavy data week ahead with all attention on the Bank of Japan policy decision on Thursday. The BOJ should maintain rates at -0.10% with a 0.25% cap remaining on the 10-year JGBs. Any changes to this policy could cause major ructions in USD/JPY. It releases PMI and Inflation on Friday.

USD/JPY has continued to rally this past week, peering over 139.00. Rhetoric is coming out of Tokyo expressing concerns about the USD/JPY rally. A rise above 140.00 next week, if it happens in a disorderly manner, could spark some unilateral intervention by the BOJ. 


Having unexpectedly tightened monetary policy this past week, there should be no further moves by the MAS until October. SGD strength lasted for less than 24 hours suggesting that the trajectory of US interest rates is still the primary driver of weakness.

Singapore releases non-oil exports on Monday, which are expected to retreat from May’s data. A more modest fall could be a short-term positive for local equities, as could a healthy trade balance release, also on Monday.

Economic Calendar

Saturday, July 16

Economic Events 

Meeting of G20 finance ministers and central bank governors continues in Indonesia 

Sunday, July 17

Economic Events

US President Joe Biden finishes up his Mideast trip

Monday, July 18

Economic Data/Events

US cross-border investment

Italy trade

Spain trade

Singapore trade

Canada housing starts

New Zealand CPI

BOE Monetary Policy Committee member Michael Saunders to deliver a speech at the Resolution Foundation

Tuesday, July 19

Economic Data/Events

US housing starts

Eurozone CPI

Hong Kong jobless rate

Mexico international reserves

UK jobless claims, unemployment

US Treasury Secretary Janet Yellen travels to South Korea

Australia’s RBA Minutes of its July policy meeting; Deputy Governor Bullock speaks

UK Chancellor Zahawi and BOE Governor Bailey address the annual Mansion House event

Bloomberg Crypto Summit in New York

Wednesday, July 20

Economic Data/Events

US existing home sales

Canada CPI

South Africa CPI


China loan prime rates

Eurozone consumer confidence


EIA crude oil inventory report

Thursday, July 21

Economic Data/Events

US initial jobless claims, Conf. Board leading index

ECB rate decision: Expected to raise rates by 25bps

BOJ rate decision: No change with policy rate and yield target expected

South Africa (SARB) rate decision: Expected to raise rates by 50bps

Turkey rate decision: No change with rates expected

Japan Trade

New Zealand Trade

Nord Stream 1 pipeline is scheduled to reopen following maintenance

Friday, July 22

Economic Data/Events

Japan CPI

European Flash PMI Readings: Eurozone, France, Germany, U.K. 

Canada retail sales

Russia rate decision: Expected to cut rates by 50bps

Eurozone ECB survey of professional forecasters

Bank of Russia board of directors meeting on monetary policy issues

Sovereign Rating Updates

Hungary (Fitch)

Ireland (Fitch)

Poland (Fitch)

Ukraine (Fitch)



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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