In the past week, financial markets focused once again on the geopolitical situation, mainly related to the Middle East, but due to the lack of major narrative shifts, investors shifted their focus increasingly toward incoming macroeconomic data. Once again, we saw a series of data releases that should keep the Fed away from potential interest rate hikes.
This week will bring investors a series of key macroeconomic and corporate catalysts. The spotlight will be on the release of the minutes from the July Fed meeting (FOMC Minutes), financial results from major US retail chains (led by Walmart), a series of inflation readings (including from Japan and the UK), and preliminary PMI indicators for major economies.
Given this schedule, the markets with the highest potential for volatility this week will be USDJPY, US500, and GBPUSD.
USDJPY
The Japanese currency faces a week packed with significant macroeconomic releases that could set the direction for the USDJPY pair in the coming weeks. At the start of the week, the market is analyzing Japan's Q2 GDP estimates. Meanwhile, on Friday, a key CPI inflation reading from Japan and the preliminary PMI indicator for the economy will be published. On the dollar side, Wednesday's minutes from the recent Fed meeting ("FOMC minutes") will be crucial.
Meanwhile, the Bank of Japan (BoJ) remains under pressure due to rising living costs and wage pressures. In the past, higher CPI inflation readings sparked speculation about faster monetary policy tightening by the BoJ, leading to sharp reactions in the yen. Currently, the market is already pricing in an 80% chance of a rate hike in September, which could support recent efforts by the governments of Japan and the US to strengthen the yen. If Friday's inflation surprises to the upside and Wednesday's Fed minutes reveal greater concerns among American policymakers about an economic slowdown, the USDJPY pair could come under downward pressure.
US500 (S&P 500 futures)
US stock indices are entering a test of domestic consumer health. Although earnings season is nearly over, financial reports from retail giants lie ahead: Home Depot (Tuesday), Target and Lowe's (Wednesday), and Walmart (Thursday). Completing the picture of the US economy will be Wednesday's minutes from the last Fed meeting and Friday's preliminary manufacturing and services PMI readings from the US.
It is worth noting that Walmart's earnings serve as a litmus test for assessing nearly 70% of US GDP generated by consumption. Historically, guidance from Walmart's management regarding consumer demand could trigger strong movements across the entire S&P 500 index. Weaker forecasts combined with FOMC minutes pointing to persistent inflation risks could become a pretext for profit-taking in the stock market. At the same time, the US stock market will remain sensitive to changing expectations regarding interest rate prospects.
GBPUSD
The third market worth special attention is the so-called "Cable", namely the GBPUSD pair, primarily due to an exceptionally tight calendar for the UK economy. On Tuesday, we will get labor market data from the UK (unemployment rate forecast at 4.9%), on Wednesday a key CPI inflation report (forecasted reading of 2.6% YoY), and on Friday preliminary PMI indicators and retail sales data.
Market pricing of future Bank of England (BoE) interest rates is extremely sensitive to wage pressure and services sector inflation. Higher-than-expected UK CPI readings in recent months effectively prevented the BoE from making a dovish pivot, but at the same time, the Bank of England itself did not decide to raise interest rates this year like the ECB, even though during the ongoing energy crisis up to 3 or 4 hikes were priced in for this year. Currently, the market expects only or as many as a single move by the end of this year. If Wednesday's inflation surprises to the upside while US PMI data disappoints on Friday, the GBPUSD pair could receive a strong upward boost.
Daily Summary: EUR/USD tries to reverse the trend; Wall Street marks its third consecutive week of gains 🚨
BREAKING: USD dips after miss in US retail sales data 💥
Market Wrap: European software stocks keep indices near record highs. Dollar gives up this week's gains (14.08.2026)
Chart of the Day 🚩 Speculations Around Faster Rate Hikes in Japan — Could USDJPY Reverse Its Trend?
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
