Summer slowdown

As we noted in our previous Week Ahead outlook, August is typically a quieter month for markets. That said, we also saw risk that a combination of Middle East tensions and possible yen intervention could inject some volatility, alongside a July US CPI report in the week just gone. This, as it turns out, was optimistic on our part. The past week, up until Friday, has been notable for its lack of significant price action, with markets seeing a pronounced summer slowdown. Granted, the dollar looks set to finish the week softer on the back of pared-back Fed tightening bets, as we thought it might. But absent that, currency markets appear stuck in the doldrums.

Still, we hold out hope that the week ahead might prove a little more exciting. Certainly, the calendar looks busier outside of the US. The UK sees a raft of data releases, and with fiscal risk still looming in the background, sterling appears primed for a retracement. In Canada, July CPI is key for 2026 BoC hiking risks, while labour market data plays a similar role in Australia. Admittedly, in terms of policy decisions scheduled, the Riksbank is the only G10 central bank on the docket, while the roster of speakers remains light. But with the coming week rounded off by PMIs, it still should offer a greater range of possible catalysts than the week just gone, hopefully sparking markets back to life.

You can read the Week Ahead in full here:

Authors:

Nick Rees, Head of Macro Research

Barry van der Laan, Senior FX Market Strategist

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