Week Ahead for FX, Bonds: U.S. Inflation Data in Focus

Markets are heading into the week of Aug. 10 with U.S. inflation data likely driving both FX and bond moves. The focus comes after July nonfarm payrolls came in unexpectedly weak, showing a drop of 23,000 against a Wall Street Journal survey forecast for a rise of 83,000—casting doubt on a possible Federal Reserve rate hike in September. Money markets currently price about a 44% chance of a September increase, per LSEG, and economists cited by major banks expect “softness” in core CPI. The key release is Wednesday’s July CPI, followed by producer prices Thursday and retail sales plus the University of Michigan sentiment survey on Friday.