Investors will eagerly await the release of the Federal Open Market Committee (FOMC) minutes this week in order to gain more information about the Fed’s plans for the rest of the year. The minutes from the FOMC meeting in July are anticipated to reflect hawkish attitudes since the Fed is reluctant to hint at an impending peak in US interest rates and markets have fully embraced the notion of a gentle landing. In the meanwhile, the UK will publish figures on inflation and wages.

The Fed has the option to stop raising interest rates and eventually lower them in early 2024 to protect the economy from a hard landing as high borrowing costs and stringent lending requirements inevitably take their toll. Markets have fully embraced the soft landing story in the US, where growth is respectable and inflation is slowing nicely.

However, the Fed could be cautious of predicting an impending peak in US interest rates because it worries that this could fuel expectations for rate cuts in 2024 and lead to a rapid decline in Treasury yields that would be harmful to efforts to bring inflation back to target.

The Jackson Hole symposium, which will take place between August 24 and 26, will be the next significant Fed event. There, Fed Chair Jerome Powell is likely to provide some additional information on the anticipated near-term trajectory of policy rates.

Geopolitical worries in Europe, Chinese property difficulties, and a robust US producer inflation report might all dampen the global mood. Last week, Chinese developer Country Garden failed to make payments on notes denominated in dollars, and on Monday, it suspended trade of 11 onshore bonds. Chinese authorities promised last month to increase policy support to help a struggling economy, but the absence of firm plans and decisive action disappointed markets.

A number of important economic reports are expected to be released in other countries next week, including those from China (industrial production and retail sales), the Eurozone (GDP and inflation), Japan (GDP growth and inflation), Germany (economic sentiment), India (wholesale and consumer prices), the UK (inflation, unemployment, and retail sales), Canada (CPI), Australia (unemployment data), Norway, the Philippines, and New Zealand (interest rate decisions).