Key points:

• Federal Reserve Chairman Powell, US retail sales, and labor market data will affect investors' expectations for the Fed's interest rate cut in September.
• European Central Bank may signal a rate cut for September on Thursday.
• The update of China's Q2 GDP data and the Third Plenum will affect market risk sentiment.

Dollars

On Monday, July 15th, the New York Fed Manufacturing Index will make the US dollar the focus. Recent economic indicators in the United States, including labor market data, indicate a rift in the economy. If the index unexpectedly drops, it may raise concerns about the US economy.

However, the retail sales data for June is expected to have a greater impact on the US dollar on Tuesday, July 16th. The downward trend in retail sales may alleviate demand driven inflation and give the Federal Reserve reason to cut interest rates. In addition, private consumption accounts for over 60% of the US economy. The decline in retail sales will have an impact on the US economy.

On Thursday, July 18th, data on unemployment claims in the United States will be released. The weak labor market conditions may support a more dovish Federal Reserve interest rate path. A higher unemployment rate may affect wage growth and reduce disposable income. The decline in disposable income may suppress consumer spending and slow down demand driven inflation. On the same day, the Philadelphia Federal Reserve Manufacturing Index data will also be released. In contrast, unemployment claims may have a greater impact on the Federal Reserve's interest rate path.

Investors should also pay attention to the comments of the Federal Reserve. Federal Reserve Chairman Powell will deliver a speech on Monday. The market will pay attention to signals regarding the September interest rate cut.

The recent inflation data has triggered investors' bets on the Fed's interest rate cut in September. According to the CME Federal Reserve Observation Tool, the probability of a September rate cut has skyrocketed from 77.7% on July 5th to 96.3% on July 12th.

Euro

On Monday, German retail sales data may affect the buying demand of EUR/USD and the interest rate path of the European Central Bank. Weak consumer demand may further alleviate inflationary pressures. Lower inflation expectations will support the European Central Bank's interest rate cut in the third quarter of 2024.

On Tuesday, the ZEW Economic Sentiment Index for Germany and the Eurozone will be the focus. The recent Eurozone Service PMI shows a weak economic environment. The worsening expectations for the German and Eurozone economies may indicate that the European Central Bank will cut interest rates in the third quarter of 2024.

However, the trade data of the eurozone also needs attention. The upward trend in imports and exports may indicate an improvement in the demand environment and drive demand for the euro.

On Wednesday, July 17th, key inflation data from the Eurozone will pique investors' interest. Lower than expected core inflation may consolidate the European Central Bank's interest rate cuts in the third quarter of 2024.

Important European Central Bank monetary policy decisions and press conferences will affect buying demand for the euro on Thursday. Investors expect the European Central Bank to keep interest rates unchanged. However, European Central Bank President Christine Lagarde may suggest a rate cut in September. In recent surveys, 80% of economists predict interest rate cuts in September and December.

Inflation has become the focus, and investors need to pay attention to the German producer prices on Friday, July 19th. The upward trend of producer prices may indicate an increase in demand driven inflation. Producers raise prices when the demand environment rises and pass on costs to consumers.

Pound

On Wednesday, UK inflation data will be released, which will affect the interest rate path of the pound and the Bank of England. Lower than expected inflation may support the Bank of England's interest rate cut in August.

UK labor market data may also affect the interest rate path of the Bank of England. Weak wage growth and high unemployment rate may give the green light for interest rate cuts in August. Weak wage growth will reduce disposable income and consumer spending. The downward trend in consumer spending may suppress demand driven inflation.

On Friday, we need to pay attention to the retail sales data in the UK. The decline in retail sales may alleviate demand driven inflation. In addition, weak retail sales may also affect the UK economy. Private consumption accounts for over 60% of the UK economy.

Canadian Dollar

On Tuesday, Canadian inflation data will affect market demand for the Canadian dollar。Lower-than-expected core inflation data will support the Bank of Canada to cut interest rates in the near future.。

In addition, Friday's retail sales data also need attention。Sharp drop in retail sales could hint at more dovish Bank of Canada rate path。

Other statistics include wholesale sales, new housing starts and raw material price indices。By contrast, the market's focus is more on inflation and retail sales data。

AUD

On Thursday, Australia's labor market data will be released, and the Australian dollar will also be affected as a result.

The rise in unemployment rate may affect wage growth and reduce disposable income. The decline in disposable income may reduce consumer spending and slow down demand driven inflation. Lower inflation expectations may alleviate the pressure on the Reserve Bank of Australia to raise interest rates.

The recent inflation data in Australia has raised investors' expectations for the Reserve Bank of Australia to raise interest rates in August.

New Zealand Dollar

On Friday, New Zealand's inflation data will affect market demand for NZD/USD. Lower than expected inflation may support a rate cut by the Reserve Bank of New Zealand in 2024.

Last week, the Reserve Bank of New Zealand maintained the cash interest rate at 5.5%. However, the Reserve Bank of New Zealand expects inflation to return to the target range of 1% to 3% in the second half of 2024.

In the first quarter of 2024, New Zealand's annual inflation rate was 4.0%.

Japanese Yen

On Wednesday, the Reuters Short Term Index may affect market demand for the Japanese yen. Higher than expected data may support the Bank of Japan's interest rate hike in 2024. This index takes into account the sentiment of the private sector. Emotional improvement may indicate an improvement in economic activity and labor market conditions.

The tight labor market conditions may increase wages and disposable income. An increase in disposable income may drive household spending and demand driven inflation.

The Japanese trade data released on Thursday also needs attention. The decline in imports and exports may offset hopes for an improvement in the macroeconomic environment.

On Friday, the crucial June inflation data may trigger investors' expectations for the Bank of Japan to raise interest rates in the third quarter of 2024. Higher than expected data may increase investors' bets on the Bank of Japan's interest rate hike in July.

In addition to data, investors should also pay attention to the comments of the Bank of Japan on the changes in its July interest rate hike bet.

China

At the beginning of this week, China's Q2 GDP data became the focus. Lower than expected economic growth may affect the market's demand for risk assets.

In addition, investors should also pay attention to retail sales, industrial production and fixed assets investment data. The weak data may trigger market expectations for further fiscal policy measures to boost the Chinese economy.

The Third Plenary Session of the CPC will be held this week, and relevant policy signals deserve investors' attention.