Week Ahead for FX, Bonds: U.S. Inflation Data in Focus; ECB Expected to Raise Rates

Markets are bracing for a week where U.S. inflation data could drive the next moves in FX and bond pricing, while Europe and Asia watch central-bank signals. The focus starts with U.S. August consumer-price inflation due Friday, following much stronger-than-expected jobs data that increased expectations of a Federal Reserve rate hike, potentially as soon as September 16. But money markets still show only partial certainty: they priced a 59% chance of a 25-basis-point hike this month and fully expected December to be priced in. Producer-price data arrives Thursday, along with weekly jobless claims and existing home sales. The Treasury will auction $58 billion in 3-year notes on Tuesday, $39 billion in 10-year notes Wednesday, and $22 billion in 30-year bonds Thursday. In Europe, the ECB is expected to raise rates again due to energy prices, while investors monitor Bank of Japan guidance and China data.