The Week Ahead - 14 - 18 July 2025

United States – We expect the Fed will have to wait another month for properly elevated inflation readings, but the y/y readings will start to rise. We expect both core and headline inflation to come in at 0.2% m/m with firmer goods inflation, but still soft services inflation, similar to May. Firmer services inflation could push the core measure to 0.3%. This implies core y/y rates rising to 2.9% and headline to 2.6%. We think retail sales, which dropped sharply last month on the back of lack of auto purchases, will not recover, and stay flat. Control sales, which excludes cars, likely rose 0.3%. On Wednesday, the Fed will release the beige book, providing insights on economic conditions in the various districts, including the impact of tariffs.

China – We expect Q2 GDP and June activity data to confirm ongoing resilience of the Chinese economy, following the US-China truce in the tariff war reached mid-May, even though we expect some slowing in real GDP growth compared to Q1 (to around 5% y/y), in line with consensus. June trade data (Monday) will likely show an improvement, but property sector data are expected to stay weak.