The most significant data release during today's session will undoubtedly be the US Personal Consumption Expenditures (PCE) inflation report. As the Federal Reserve's preferred measure of inflation, this could be crucial in building a consensus for a rate cut, although August's CPI and NFP labour market data will also be released before the September meeting. It is worth noting that PCE inflation may be elevated due to tariffs, though the main impact is expected to be seen in the August figures. This afternoon will also bring inflation data from Germany, the eurozone's largest economy, while the final University of Michigan Consumer Sentiment Index for August will be released shortly after the US session opens.
Earlier this morning, Germany's retail sales figures were released, showing a weak performance. Sales fell by 1.5% month-on-month in July, a steeper decline than the expected 0.4%. Import prices fell by 1.4% year-on-year and 0.4% month-on-month, a larger drop than anticipated, which is linked to the strength of the euro.
In France, August's CPI inflation was 0.9% year-on-year, against an expected 1.0%. Final Q2 GDP came in at 0.3% quarter-on-quarter, in line with expectations.
Calendar (BST time):
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08:00 Spain - August CPI Inflation (Forecast: 2.8% y/y; Previous: 2.7% y/y)
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08:00 Spain - August Monthly CPI Inflation (Forecast: 0.1% m/m; Previous: -0.1% m/m)
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08:00 Spain - July Retail Sales (Forecast: 0.1% m/m; Previous: -0.3% m/m)
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13:00 Germany - August CPI Inflation (Forecast: 2.1% y/y; Previous: 2.0% y/y)
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13:00 Germany - August Monthly CPI Inflation (Forecast: 0.0% m/m; Previous: 0.3% m/m)
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13:30 USA - Core PCE Inflation (Forecast: 2.9% y/y; Previous: 2.8% y/y)
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13:30 USA - Monthly Core PCE Inflation (Forecast: 0.3% m/m; Previous: 0.3% m/m)
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13:30 USA - PCE Inflation (Forecast: 2.6% y/y; Previous: 2.6% y/y)
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13:30 USA - Monthly PCE Inflation (Forecast: 0.3% m/m; Previous: 0.3% m/m)
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13:30 Canada - Q2 Annualised GDP (Forecast: -0.6%; Previous: 2.2%)
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13:30 Canada - June Monthly GDP (Forecast: 0.1% m/m; Previous: -0.1% m/m)
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15:00 USA - August UoM Consumer Confidence Index (Forecast: 58.6; Previous: 61.7)
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15:00 USA - 1-Year Inflation Expectations (Forecast: 4.9%; Previous: 4.5%)
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15:00 USA - 5-Year Inflation Expectations (Forecast: 3.9%; Previous: 3.4%)
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