ECB Won’t Flinch Yet in the Shadow of Trump’s Trade War

US and Canada

The US economic data calendar is relatively light and highlighted by a pair of housing market reports. On Wednesday, June data from the National Association of Realtors are projected to show a third month of scant change in sales of previously owned homes. Contract closings have been hovering near an annualized rate of 4 million, just above last year’s level that was the weakest since 2010.

Meanwhile, economists expect a government report on Thursday to show new-home sales recovered a bit in June after posting the biggest monthly decline since 2022. The pace of contract signings on new houses has largely trended sideways for the better part of two years.

The housing market has struggled to gain traction as elevated mortgage interest rates and affordability constraints keep many potential buyers sidelined.

Other reports include Friday’s release of June durable goods orders, preceded by S&P Global’s July manufacturing and services surveys on Thursday.

Fed policymakers are in a blackout period ahead of their July 29-30 meeting, although Chair Jerome Powell on Tuesday gives welcoming remarks at a conference focused on capital frameworks for large banks.

Further north, the Bank of Canada’s business and consumer surveys for the second quarter will offer fresh insight into inflation expectations and investment plans.

Retail data for May and a flash estimate for June are likely to show slumping sales as consumers pull back after a tariff-driven rush to buy cars earlier in the year. Two fiscal monitors from the federal government may contain more details about retaliatory tariff revenues collected to date.

Asia

Asia’s data docket offers a broad cross-section of economic signals, from trade in South Korea to inflation indicators in Japan, Singapore and New Zealand. The figures will help clarify how the region’s economies are responding to trade-related uncertainties.

South Korea opens the week on Monday with 20-day trade data, an early indicator for July exports. Next follows consumer confidence on Wednesday and retail sales during the week, offering a read on household conditions after the Bank of Korea held rates steady this month.

Also on Monday, China will release loan prime rates, which are expected to be kept steady for a second month in July, taking a cue from the People’s Bank of China.

Australia takes the spotlight on Tuesday with minutes from the Reserve Bank’s July policy meeting, at which it shocked investors by keeping rates on hold at 3.85%.

The minutes may offer a clearer sense of how close policymakers are to resuming their easing cycle. RBA Governor Michele Bullock is gives a speech on Thursday.

On Tuesday, Taiwan is set to publish export orders for June, along with employment data.

India’s July PMIs, due Thursday, will indicate the resilience of both manufacturing and services activity. Japan closes out the week on Friday with a full slate of data, including Tokyo CPI, department store sales and factory activity. The inflation reading will offer an early steer on national price trends, while the other releases will help assess how well domestic demand and production are holding up.

New Zealand reports second-quarter inflation on Monday, while Singapore publishes its price gauges on Wednesday and industrial production data on Friday. Thailand has car sales and customs trade balance figures during the week.

Europe, Middle East, Africa

The UK will release public finance data on Tuesday at a time when its economic woes and fiscal position are very much in focus.

With unemployment at a four-year high and growth faltering, PMI numbers on Thursday and retail sales on Friday may also draw attention.

Britain’s exposure to market stress may be a topic when Bank of England Governor Andrew Bailey and colleagues testify on financial stability to lawmakers on Tuesday. Their report on the matter earlier this month highlighted how UK bonds risk being hit by a wave of forced selling by highly leveraged hedge funds.

Consumer-price numbers are among the highlights elsewhere. Data on Wednesday from South Africa will likely show inflation quickened to 3.1% in June from 2.8%, due to higher meat prices. Iceland’s equivalent numbers are published the following day.

Aside from the ECB, other rate decisions are scheduled across the wider region:

Nigerian policymakers will probably leave their key rate unchanged at 27.5% for a third straight meeting on Tuesday, as inflation at 22.2% remains elevated and both core and food price growth have started accelerating again.
Hungary’s central bank is expected to keep borrowing costs on hold for a 10th consecutive month the same day, despite a sluggish economy, after inflation accelerated in June.
The Ukrainian central bank is set to decide on policy two days later. Officials in Kyiv have kept the main rate at 15.5% since a hike in March.
Turkish policymakers are expected to resume cutting borrowing costs on Thursday after reversing course in the face of political turbulence in March. The central bank is forecast to cut the key rate to 43.5% from 46%.
The Bank of Russia has indicated it’s likely to lower borrowing costs when policymakers meet on Friday, possibly by more than the 100 basis points reduction it announced in June that brought the key rate to 20% from a record high 21%.

Latin America

Argentina on Monday posts May GDP-proxy data. Economic activity in April jumped 1.9% from March and 7.7% a year earlier as President Javier Milei loosened some currency controls, part of a $20 billion agreement with the International Monetary Fund.

Analysts surveyed by Bloomberg last month marked up their year-on-year forecasts for Argentina’s second- and third-quarter output, to 8% and 4.2% respectively.

Mexico, Latin America’s No. 2 economy, takes center stage at mid-week, offering up economic activity data along with the mid-month consumer prices report.

The May GDP-proxy print on Tuesday comes on the heels of April’s better-than-expected readings, and after the economy flirted with a technical recession earlier in the year.

A proliferation of headwinds — not least of which are US tariff and trade policies — has many analysts forecasting a shallow second-quarter slump, though.

After a string of uncomfortably warm inflation readings, Mexico’s June prints ticked down as supply shocks cooled. Against the backdrop of forecasts for modest disinflation, the central bank has signaled that it’s likely to slow the pace of its easing cycle.

Closing out the week, Brazil’s mid-month inflation report will likely see a third straight lower reading under the weight of the highest borrowing costs in nearly two decades.

Inflation expectations for 2025 have begun to come down, but remain above the central bank’s target to the forecast horizon.

—With assistance from Beril Akman, Mark Evans, Vince Golle, Tony Halpin, Erik Hertzberg, Robert Jameson, Swati Pandey and Monique Vanek.