Week in Review

The week of August 24–28, 2026 reinforced the mid-phase character of the U.S. expansion through a series of mixed but non-disruptive releases. Labor market data showed resilience as ADP private payrolls rose from the prior reading while weekly jobless claims printed close to consensus. These prints offset the Chicago Fed National Activity Index decline and sustained the view of selective strength rather than broad acceleration. Housing market data diverged as home prices accelerated year-over-year, exceeding consensus and the prior reading, yet New Home Sales dropped against expectations and consumer confidence slipped. The contrast highlighted rate-sensitive weakness in transaction volumes alongside continued price support. Q2 GDP was confirmed matching the second estimate. Core PCE rose in line with forecasts, keeping the year-over-year rate above the 2% target. Durable goods orders increased while personal income and spending advanced. Markets absorbed the configuration without altering the data-dependent policy baseline. Treasury yields rose early in the week before easing, and equity indices closed the period modestly higher. The through-line remains tolerance for divergent prints without immediate recalibration of the Federal Reserve’s forward guidance.

Fed Watch

Federal Reserve speakers maintained the data-dependent posture throughout the week. Barkin delivered two addresses on August 25 without shifting market expectations for the policy rate. Treasury Secretary Bessent’s remarks on August 24 were interpreted as neutral on near-term fiscal support. No FOMC decisions or minutes were released. Q2 GDP and Core PCE reinforced that inflation remains above the 2% target while growth stays positive but subdued. The configuration leaves the policy rate on hold in the near term. Forward guidance continues to emphasize incoming figures rather than pre-set adjustments. We view the medium-term rate path as unchanged absent clearer deviations in subsequent labor or inflation data.

Data Review

Chicago Fed National Activity Index printed below the prior reading on August 24, missing expectations and signaling below-trend momentum. ADP Employment Change beat expectations with a gain versus the prior reading. Home prices accelerated year-over-year against consensus and the prior reading, confirming price resilience. Consumer confidence declined while New Home Sales fell, missing consensus and posting a month-over-month drop. Q2 GDP was confirmed unchanged from the second estimate. Core PCE matched the month-over-month consensus, leaving the year-over-year rate above target. Durable goods orders rose while personal income and spending increased. The releases together indicate that growth remains positive but below potential, inflation pressures persist above the 2% goal, and the Federal Reserve’s rate path stays on hold pending further evidence. Retail sales continue to support consumption without overriding the slower GDP pace.

The Week Ahead

Markets will focus on the Dallas Fed Manufacturing Index on August 31. ISM Manufacturing PMI is expected alongside JOLTs Job Openings. ADP Employment Change is forecast for September 2. Factory Orders are projected to rise month-over-month. Trade Balance data on September 3 carries a consensus. Michigan Consumer Sentiment final and Chicago PMI will also print. These releases will provide fresh reads on manufacturing momentum, labor demand, and external balances. Central bank speakers include Fed’s Barr on September 1. The data will inform whether the GDP pace and above-target inflation trend persist into September.

Risks & Themes

The week’s mixed housing and activity prints shift positioning toward caution on rate-sensitive sectors while supporting commodity-linked assets. Upside risks center on sustained price momentum in home price data if consumer spending holds. Downside risks include further New Home Sales weakness if yields remain elevated. Market mispricing signals appear limited given the alignment of GDP and PCE with consensus. Volatility stayed contained as the S&P 500 posted only modest daily swings. Flow considerations favor selective equity exposure over broad duration given the yield rise. We see balanced risks around the current data-dependent baseline.

Cross-Asset

The S&P 500 rose week-over-week to close at 7,711.76 while the Nasdaq 100 gained to 29,433.43 and the Dow Jones advanced to 53,559.99. The Russell 2000 declined to 2,972.37. The 10-year Treasury yield increased after touching a higher level mid-week, and the 2-year yield ended lower. USD/JPY rose to 160.07 while EUR/USD fell to 1.16 and GBP/USD declined to 1.35. Gold fell to 4,529.90 and WTI Crude dropped to 83.40. Daily moves included the S&P 500 advancing after the GDP and PCE releases while the 10-year yield declined that session. Bitcoin gained to 78,856.15. The configuration reflected modest risk appetite alongside higher yields driven by the steady growth and persistent inflation prints.

Global Context

Energy price moves in the last seven days showed WTI Crude declining, easing imported inflation pressure for the United States. Gold’s drop reflected reduced safe-haven demand. USD/JPY strength to 160.07 may influence trade balances with Asian partners. No major geopolitical events altered cross-border spillovers in the period. Trade dynamics remain steady with the prior week’s configuration intact.

Week in Review

German business sentiment improves. The latest IFO reading exceeded consensus and lifted the DAX that session. French consumer confidence missed expectations and weighed on the CAC 40. These outcomes highlighted uneven performance across member states.

Activity data supports gradual disinflation. German second-quarter GDP beat forecasts on stronger exports. Eurozone unemployment stayed steady while headline inflation held near recent levels. The configuration left the ECB deposit rate unchanged.

Commodity impulse eases imported pressures. Brent crude declined over the week, lowering near-term inflation risks relative to the prior advance. Gold moved lower. Equity markets absorbed the moves, with the Euro Stoxx 50 rising.

Policy expectations stay anchored. No ECB speakers altered forward guidance. Markets priced limited near-term easing after the positive activity surprises. The through-line remains data dependence amid uneven growth and moderating energy prices.

ECB Watch

ECB officials maintained data-dependent guidance with the deposit rate unchanged throughout the week. No policy decisions or minutes were released. The positive activity surprises tempered earlier expectations for near-term easing without prompting any shift in forward guidance.

Speakers reiterated that decisions rest solely on incoming figures. Eurozone inflation stability removed immediate pressure for acceleration or abrupt policy changes. Markets now anticipate only limited easing by year-end as officials emphasize resilience signals.

The configuration leaves the medium-term rate path anchored to subsequent releases, including next week’s preliminary prints. No direct quotes altered the stance during the period.

Data Review

German business sentiment printed above consensus, marking a positive surprise and confirming manufacturing-led expansion. French consumer confidence came in below expectations, highlighting services softness. German second-quarter GDP exceeded forecasts and offset earlier consumption weakness.

Eurozone headline inflation remained stable year-over-year, consistent with the unchanged deposit rate and supporting the view that the cycle sits in mid-phase without fresh tightening pressure. Unemployment provided a stable labor backdrop that aligns with gradual disinflation. These outcomes cluster around selective resilience rather than synchronized momentum.

The data reinforce tolerance for mixed national results, with German industrial strength contrasting French consumer caution. No high-impact inflation releases occurred during the week, keeping focus on sentiment surveys and their implications for the growth outlook.

The Week Ahead

German import prices and Danish unemployment data are due early in the week. Spanish and Italian manufacturing PMI prints will test expansion thresholds. German factory orders and Spanish services PMI follow later. Italian unemployment is also scheduled. These releases will clarify whether the mid-phase expansion persists.

ECB speakers are scheduled but carry low market-moving potential absent surprises. The data will inform whether the deposit rate path requires adjustment.

Risks & Themes

Resilient German data reduce downside growth risks but leave upside inflation scenarios open if energy prices rebound. Positioning shows limited conviction for near-term ECB cuts after the latest activity prints. Volatility remains contained as markets price data dependence without abrupt shifts.

Upside surprises in next week’s inflation prints could steepen the Bund curve further. Downside risks center on French consumer weakness extending into services PMIs. Flow considerations favor selective duration buying in German bonds over peripheral spreads.

Cross-Asset

Euro Stoxx 50 closed the week at 6,485.67, up 0.58%, while the DAX advanced 1.77% to 26,569.99. CAC 40 declined 0.61% to 8,401.18. German 10-year Bund yield moved lower, reflecting duration buying after resilient activity data.

EUR/USD eased 0.81% to 1.16. EUR/GBP was unchanged at 0.86 while EUR/JPY declined 0.20% to 185.26. Brent crude dropped 4.42% to 88.10 while gold fell 2.39% to 4,529.90. Bitcoin rose 1.42% to 78,856.15 on broader risk-on flows.

Global Context

Brent crude’s decline eased imported inflation pressures across the bloc relative to the prior week’s level. Gold’s drop reflected lower global safe-haven demand. EUR/USD weakness occurred against a backdrop of mixed external activity signals.

Trade dynamics showed no fresh disruptions in the last seven days. Geopolitical risks remained contained without new commodity spikes. The configuration supports the Eurozone’s mid-cycle stance through selective resilience.

Week in Review

Inflation release sets policy tone. July CPI rose on a year-over-year basis, exceeding the prior reading and aligning with earlier wholesale price gains. The print arrived alongside a current-account deficit that had missed forecasts, sustaining the narrative of uneven external balances.

Labour market stability persists. The unemployment rate held near the consensus level through the period, matching the narrow range observed since June and providing no fresh evidence of labour-market slack that might delay normalisation.

Equity and currency moves diverge. The Nikkei 225 rose from the prior week’s close to 66,405.56 by 30 August, a net gain of 1.34% week-over-week, while USD/JPY climbed to 160.07. The 10-year JGB yield moved higher intraday before settling lower, consistent with the multi-week climb earlier in August.

External factors weigh on sentiment. Brent crude fell 4.42% to 88.10 over the week, easing imported-energy costs after the prior week’s advance, yet gold declined 2.39% to 4,529.90. Corporate hedging activity intensified as firms positioned for extended yen depreciation near 160 levels.

Policy communication anchors expectations. Himino’s 27 August speech highlighted the need to weigh data against persistent inflation pressures, echoing the Bank of Japan’s unchanged stance. No major data surprises emerged beyond the CPI release, leaving the expansion narrative intact.

Fiscal backdrop adds pressure. Authorities modelled higher assumed bond interest rates for fiscal 2027, highlighting rising debt-service costs that interact with shortfalls for food tax cuts and defence spending.

BoJ Watch

BoJ board member Himino stated on 27 August that policy adjustments must balance incoming economic data against inflation risks, directly referencing the July CPI print and the steady unemployment rate. The remarks reinforced the data-dependent framework maintained since the prior meeting, with no alteration to the policy rate. July CPI supplied additional justification for gradual normalisation, consistent with the pickup in wholesale prices recorded two weeks earlier. The speech contained no explicit forward guidance on the timing of the next decision, leaving the path dependent on subsequent activity indicators such as industrial production and household spending. Earlier intervention outlays continued to limit yen volatility around 160 without shifting the Bank of Japan’s communication stance.

The Week Ahead

Monday brings the Consumer Confidence Index and Housing Starts Year-over-Year, both high-to-medium impact releases that will test household resilience ahead of the next meeting. Capital Spending Year-over-Year follows on the same day, offering an early gauge of corporate investment momentum. Industrial Production Month-over-Month Preliminary and Retail Sales Year-over-Year print on Sunday, extending the flow of domestic demand data into early September. Wednesday features a speech by BoJ’s Takada that markets will parse for any additional signals on the pace of adjustments. Household Spending Month-over-Month and Year-over-Year releases on Thursday carry medium impact and will inform consumption trends that feed directly into the Bank of Japan’s assessment of underlying price pressures. These prints collectively shape the information set for upcoming decisions without altering the data-dependent posture observed this week.

Risks & Themes

Sustained yen weakness past 160 raises imported inflation risks that could accelerate the normalisation path if July CPI momentum persists into coming quarters. A sharper-than-expected drop in industrial production or retail sales would challenge the selective resilience narrative and potentially delay adjustments at the next meeting. Fiscal modelling of higher bond rates adds upside pressure on yields that could interact with BoJ purchases, creating tension between debt-service costs and policy objectives. Energy price volatility remains a key swing factor, as the recent Brent decline could reverse and re-anchor inflation vigilance. The market’s focus on verbal intervention rather than fresh data surprises leaves room for communication gaps if upcoming speakers diverge from Himino’s balanced tone.

Week in Review

Trade tensions dominate market moves. US-Canada tariff retaliation drove the dominant narrative as talks collapsed and Ottawa signaled counter-duties, pushing USD/CAD higher. The S&P/TSX advanced on August 24 and August 26, supported by bank earnings beats from Royal Bank of Canada and National Bank of Canada. WTI Crude and Brent Crude declined amid export exposure fears.

Stronger news on 2H GDP. The August 28 GDP release showed annualized growth rebounding versus the prior quarter, with month-over-month GDP meeting consensus and confirming a sharp rebound after first-quarter weakness. Current Account Balance data on August 27 narrowed from the prior deficit, highlighting external pressures that aligned with tariff headlines.

Inflation trends moderating. CPI remained elevated with no new prints during the week, while Canada 10Y yields fell on safe-haven flows even as the 2Y yield edged higher. Gold declined on August 24 before closing the week lower, reflecting hedging amid policy uncertainty. Unemployment held steady from July, providing a stable labor backdrop that did not override the growth rebound signal.

Policy and external balance signals. No Bank of Canada speakers appeared, leaving the policy rate unchanged while private-credit expansion concerns persisted in official commentary. The week’s arc showed data resilience on GDP offsetting tariff-driven CAD weakness, with the TSX closing lower for the week and Natural Gas rising.

BoC Watch

Bank of Canada held the policy rate steady through the week with inflation above target, maintaining its data-dependent stance ahead of the next decision. Officials absorbed the second-quarter GDP rebound without altering forward guidance, noting that tariff retaliation introduces downside risks to export sectors. The August 27 Current Account Balance print highlighted external pressures that reinforce caution on growth. No new speeches or minutes emerged, leaving the committee focused on incoming activity and inflation prints. The GDP outturn supports the view that easing will proceed more slowly than earlier anticipated, consistent with prior weeks’ emphasis on selective resilience.

The Week Ahead

Tuesday brings the S&P Global Manufacturing PMI Index, providing the first read on September activity after the prior print. Wednesday features the Bank of Canada Interest Rate Decision with consensus unchanged, followed by the Press Conference that will update guidance on the rate path. Thursday releases the Trade Balance, which will clarify external pressures from tariff measures. Friday delivers the Unemployment Rate alongside Employment Change and Ivey PMI. These releases will inform the Bank of Canada’s assessment of labor market stability and growth momentum into coming quarters. The combination of the rate decision and labor data will shape expectations for policy parameters through the balance of the year.

Risks & Themes

Escalating US-Canada tariffs introduce downside risks to GDP and CAD that the second-quarter rebound only partially offsets. Energy price volatility remains elevated after weekly declines in WTI Crude and Brent Crude. The data suggests markets may underweight the persistence of trade frictions relative to the growth print, leaving CAD exposed to further retaliation announcements. Upside scenarios hinge on a swift resolution that stabilizes exports, while downside paths center on prolonged duties weighing on the Current Account Balance trajectory. The Bank of Canada’s unchanged policy rate signals vigilance on these external shocks without immediate recalibration.

Week in Review

Activity data supported domestic resilience. Equity markets closed lower, with IPC Bolsa ending at 65484.32 for a 0.44% weekly decline. The peso moved weaker, with USD/MXN finishing at 17.03 after a 0.67% increase over the week.

Trade data gap adds uncertainty. The absence of the July trade balance release left export momentum unconfirmed. WTI crude fell to 83.4 and Brent to 88.1, reducing energy-linked support for the external accounts.

Inflation and rate signals remain contained. Short-term rates eased while longer-term yields rose, producing modest curve steepening. Gold closed at 4529.9 after a 2.39% weekly decline, providing limited safe-haven offset.

Market positioning stayed light. Daily equity moves remained contained amid thin volumes. Remittance inflows and nearshoring investment continued to anchor external accounts even as global oil prices declined. The configuration leaves growth momentum intact while highlighting the need for subsequent releases to clarify export trends.

Banxico Watch

No central-bank communications were released during the week. Activity indicators and incoming inflation prints remain the clearest inputs for upcoming policy assessments. The absence of commentary kept market focus on growth momentum and external-account exposure to oil-price volatility.

The Week Ahead

Business Confidence and Consumer Confidence releases will provide early gauges of third-quarter sentiment. Both indicators will feed into assessments of domestic demand resilience. No central-bank speakers are currently listed, keeping attention on activity indicators as the primary inputs for the next policy meeting. Markets will also monitor any follow-through from USMCA trade discussions that could affect export momentum.

Risks & Themes

Oil-price weakness raises downside risks to fiscal and current-account projections if energy prices remain subdued. Persistent USMCA disputes could amplify peso volatility. On the upside, sustained nearshoring investment and remittance inflows may continue to support the external accounts. The growth-inflation mix remains balanced, yet any sharper oil-price drop could widen the current-account gap.

Week in Review

Equity Market Resilience Brazilian equities posted steady gains through the period with Bovespa closing at 175,665 after a 2.19 percent weekly advance. Vale shares posted a modest weekly decline while Petrobras rose 2.55 percent to close at 18.53. The absence of scheduled releases left price action tied to global commodity flows.

Currency and Commodity Dynamics USD/BRL climbed to 5.21 as the real posted a 1.33 percent weekly loss. EUR/BRL moved to 6.03, up 0.57 percent over the same span. WTI crude declined 1.89 percent to 83.40 while gold fell 2.39 percent to 4,529.90, reducing external support for commodity-linked assets.

Labor Market and Policy Anchors No domestic data prints occurred during the week.

Fiscal and External Context No domestic data prints occurred during the week.

BCB Watch

No speeches or minutes were released during the week. Officials have reiterated that decisions rest on incoming figures, leaving the rate path dependent on the balance of growth and inflation prints through the next meeting.

The Week Ahead

GDP Growth Quarter-over-Quarter and Year-over-Year prints will provide the first full-quarter growth signal. Industrial Production Month-over-Month follows, testing whether manufacturing momentum has stabilized. S&P Global Services PMI Index will update the services sector. Trade Balance data will highlight export resilience amid commodity price volatility. These releases together shape the growth and inflation backdrop for the Banco Central do Brasil ahead of upcoming decisions. Stronger-than-expected GDP or industrial figures could reinforce the case for holding the policy rate, while softer prints may reopen discussion of the timing for any adjustment.

Risks & Themes

Fiscal sustainability concerns remain elevated. Commodity dependence leaves Bovespa and the real vulnerable to further swings in iron ore and oil, as evidenced by the divergent weekly moves in Vale and Petrobras. A hotter-than-expected GDP print could delay any policy-rate discussion at the next meeting, while a sharp downside surprise would challenge the mid-phase expansion narrative. The market continues to price limited near-term easing, leaving room for repricing if subsequent data confirm persistent inflation or renewed fiscal slippage.

Week in Review

Equity Market Performance Argentine equities posted a net weekly decline, with the Merval closing at 2,979,472. The index advanced early in the week before giving back ground on thin volumes. Bank and energy shares led the advance, while soybean futures gains provided support through the period.

Inflation Print and Implications July CPI came in above consensus and pushed the annual rate higher. Core goods and services components drove the overshoot, with the Treasury recording a primary surplus aided by lower energy subsidies. The data confirmed persistent price pressures even as external accounts showed a trade surplus supported by soybean shipments.

Reserve Accumulation and External Flows Net reserves rose on soy export pre-payments. USD/ARS climbed steadily before settling at 1,512.25, reflecting the ongoing crawl. Brent crude declined while gold declined, easing some import cost pressures but highlighting commodity volatility.

Fiscal and Growth Backdrop ECLAC upgraded its GDP forecasts, citing improving external conditions. Congress approved a budget framework targeting a primary surplus, reinforcing consolidation efforts. Labor market weakness and subdued domestic demand continued to constrain the recovery pace despite the solid trade balance.

BCRA Watch

The July CPI overshoot directly tempered expectations around the Central Bank of Argentina’s policy rate path. Officials have maintained a data-dependent stance with no adjustment to parameters signaled in the week. Net reserve gains on soybean inflows provide some buffer, yet the annual inflation rate underscores the need for continued vigilance on price convergence. The peso’s daily crawl continues to lag the inflation print, widening the real appreciation gap and complicating reserve management ahead of upcoming decisions. Fiscal execution data align with program targets but do not alter the inflation signal from the latest release.

The Week Ahead

Attention next week centers on weekly BCRA reserve and monetary base updates that will clarify intervention pace. Soybean export registrations and global price movements will influence peso liquidity and trade surplus trends. Treasury bill auctions are expected to provide signals on local funding costs and demand. Global commodity developments, particularly Brent crude and soybean futures, remain key inputs for fiscal revenue and external balance forecasts. Provincial bond placements may offer further evidence on financing conditions. The data flow will inform the Central Bank of Argentina’s assessment of inflation convergence ahead of upcoming decisions. External risk sentiment from developed-market releases could spill into Argentine assets given the open capital account. Sustained reserve accumulation will stay central to meeting program objectives in coming quarters.

Risks & Themes

The inflation overshoot shifts the near-term outlook toward greater caution on the policy rate path, with downside risks to growth from weak employment and consumption. Upside scenarios hinge on continued soybean-driven reserve gains that could ease pressure on the crawling peg. The market appears to underweight the persistence of core price pressures evident in the annual rate. Fiscal consolidation progress to a primary surplus target provides a buffer, yet any slippage in external accounts could reintroduce volatility. Commodity price swings remain the dominant transmission channel for both upside and downside surprises in coming quarters.

Week in Review

Commodity divergence drives asset moves. Copper advanced 0.91% to 6.66 over the five trading days while Brent crude declined 4.42% to 88.10, producing clear winners and losers across the three economies. Chile and Peru benefited from the metal price lift, yet equity indices still closed lower as profit-taking emerged late in the week. MSCI Chile dropped 3.03% to 40.99 and MSCI Peru fell 2.10% to 92.30. Colombia recorded no equity movement.

Currency pressure concentrated on the COP. USD/COP rose 5.18% to 3,201.98, the largest weekly depreciation among the three currencies, as lower Brent prices weighed on fiscal and external accounts. USD/CLP increased 1.03% to 930.58 and USD/PEN rose 1.85% to 3.35, reflecting more moderate moves tied to copper and gold. Gold itself declined 2.39% to 4,529.90.

Data calendar remained empty. No inflation, GDP, or trade releases occurred in Colombia, Chile, or Peru between August 24 and August 28, leaving commodity flows and external risk sentiment as the sole drivers. The absence of prints reinforced the data-dependent stance already evident in prior weeks, with no fresh evidence to alter growth or inflation trajectories. Regional equity and FX trading stayed orderly despite the lack of domestic catalysts.

Policy parameters stayed fixed. The Chile short-term rate held at 4.50% with no adjustment, consistent with the unchanged settings reported for BanRep and BCRP. Commodity price volatility continued to shape fiscal balances, with Chile and Peru leveraged to copper while Colombia faced the opposite impulse from Brent. Overall, the week confirmed selective resilience along commodity lines without synchronized momentum across the Andean bloc.

Andean Central Banks Watch

BanRep, BCCh and BCRP left policy rates unchanged, with the Chile short-term rate fixed at 4.50% and no forward guidance shifts communicated. The data-light week provided no new inflation or activity prints to test existing parameters, leaving officials reliant on the contained inflation outcomes reported in prior periods. Copper strength at 6.66 offered indirect support to Chilean and Peruvian external balances, while Brent weakness at 88.10 added pressure on Colombian fiscal receipts without prompting immediate policy reaction. Officials across the three central banks continued to emphasize incoming figures as the sole basis for any future adjustments, consistent with the data-dependent posture maintained through the mid-phase expansion. No minutes or speeches altered the signal that rate paths remain on hold pending clearer evidence on growth and price dynamics.

The Week Ahead

The calendar for August 31–September 4 shows no scheduled inflation, GDP, or trade releases in Colombia, Chile, or Peru, extending the data-light environment. Attention will remain on global commodity prices, particularly copper near 6.66 and Brent near 88.10, given their direct transmission to CLP, PEN, and COP valuations. Any follow-through in metal demand indicators could influence growth expectations ahead of the next BanRep, BCCh, and BCRP decisions. External risk sentiment shaped by U.S. and euro-area indicators will likely dictate flows into local-currency assets and equities. Officials are expected to reiterate that upcoming decisions rest on incoming data, with no domestic prints available to shift the current hold stance.

Risks & Themes

The week’s commodity split widens the outlook divergence, with copper support potentially sustaining external balances in Chile and Peru while Brent weakness raises fiscal risks for Colombia. A further decline in Brent could intensify COP depreciation pressure and imported inflation concerns for BanRep. Conversely, sustained copper strength would reinforce the case for stable or slower easing at BCCh and BCRP. Equity underperformance despite commodity gains highlights downside risks to growth sentiment if external demand softens. The market appears to underweight the persistence of the data-dependent stance, as the empty calendar leaves rate paths anchored until subsequent releases alter the balance.

Week in Review

Retail survey signals contraction The retail survey highlighted renewed weakness in volumes after earlier services resilience. UK GDP had shown only modest rebound in prior months while the labour market continued to shed jobs.

Equity markets hold steady amid thin data The FTSE 100 closed the week at 10824.3, down 0.28 percent overall. The FTSE 250 gained 0.90 percent to 24938.8, supported by mining names. Volumes stayed light with no major domestic releases.

Fixed-income markets price steady policy The 10-year gilt yield declined. Sterling slipped 0.89 percent to 1.35 against the dollar. Markets absorbed the soft trade data without shifting expectations for the Bank of England.

Commodity impulse moderates Brent crude declined 4.42 percent to 88.10 while gold fell 2.39 percent to 4529.9. UK natural gas rose 3.81 percent to 2.89. These moves occurred against a backdrop of mixed global trade headlines that left UK exporters focused on external developments.

BoE Watch

The Bank of England held the policy rate steady following the latest decision, with no adjustment to forward guidance. No MPC members spoke publicly during the week. Markets continued to price the first cut on the basis of verified data. The retail miss reinforced the mixed inflation and labour picture. Energy bills are set to rise for a second consecutive quarter, adding to household costs without altering the current restrictive stance relative to inflation. The data-dependent approach leaves the rate path unchanged until subsequent releases shift the balance.

Data Review

No high-impact UK releases occurred during the week. The labour market continued to show resilience without overheating, while services activity remained the primary growth driver and goods sectors lagged. Retail weakness suggests consumer spending momentum may be fading. These conditions leave the inflation and growth outlook mixed, with price pressures in services still elevated. The configuration supports a data-dependent stance at the Bank of England without immediate pressure to alter the policy rate path. Revisions to prior activity signals remain limited, confirming selective resilience rather than broad acceleration.

The Week Ahead

Attention turns to housing prices and credit data due early next week. These figures will provide the next gauge of housing momentum and credit demand ahead of the next MPC meeting. Construction PMI follows, testing whether the sector has stabilised. Governor Bailey is scheduled to speak, with markets watching for any update on growth priorities. The releases matter because they will inform whether consumer and housing resilience can offset the retail weakness. No other high-impact UK events are scheduled before the September MPC gathering.

Risks & Themes

The retail downside surprise shifts the near-term growth outlook lower and raises the possibility that consumer spending will weaken further into the autumn. Upside scenarios centre on resilient housing data and steady credit flows that could support a later cut. Downside scenarios would materialise if construction and mortgage data also disappoint, reinforcing the job-loss trend. Market positioning shows light volumes and limited conviction ahead of the data cluster, leaving gilt yields and sterling sensitive to surprises. The absence of fresh MPC communication keeps expectations anchored to the current policy rate until verified prints alter the balance. Volatility remains contained while external commodity moves continue to influence imported inflation signals.

Cross-Asset

Equities posted modest net gains with the FTSE 100 closing at 10824.3, down 0.28 percent week-over-week. The FTSE 250 rose 0.90 percent to 24938.8. Bonds saw the 10-year gilt yield compress, reflecting duration demand. FX markets showed GBP/USD declining 0.89 percent to 1.35 and GBP/EUR slipping 0.06 percent to 1.17. Commodities delivered the largest moves, with Brent crude falling 4.42 percent to 88.10 and gold declining 2.39 percent to 4529.9. UK natural gas advanced 3.81 percent to 2.89. Bitcoin rose 1.38 percent to 78830.5. Daily equity moves remained contained.

Global Context

Brent crude’s weekly decline eased immediate imported-price pressure for the United Kingdom after earlier advances. Gold’s drop reflected broader risk-on flows that supported selective equity resilience. US-Canada trade progress noted in prior sessions could ease tariff exposure for UK exporters over time. Global activity signals remained mixed, with no major central bank altering parameters on the basis of single-week prints. These cross-border developments leave UK inflation vigilance focused on domestic services prices rather than uniform external tightening pressure.

Week in Review

Riksbank Decision Anchors Regional Policy Tone The Riksbank held its policy rate after completing its easing cycle, explicitly keeping the tightening option open given krona weakness. USD/SEK rose 1.31% week-over-week to 9.59 while EUR/SEK advanced 0.47% to 11.11. Sweden’s July CPI YoY and July PPI eased, both consistent with subdued price pressures yet insufficient to alter the bank’s stance.

Equity Markets Show Selective Resilience Nordic equities posted modest net gains despite thin volumes and no tier-1 data releases on most days. OMX Stockholm 30 advanced 1.23% weekly, OMX Copenhagen 25 rose 0.17%, and OMX Helsinki 25 gained 1.88%. Oslo Bors lagged as Brent crude’s 4.42% decline weighed on energy names. Daily moves remained contained.

Commodity Impulse and Yield Divergence Brent’s decline reduced support for NOK, which saw USD/NOK rise 0.40% to 9.34. Sweden 10Y yields moved higher while Norway 10Y yields fell, reflecting divergent fiscal and inflation outlooks. Gold declined while Bitcoin rose, indicating mixed safe-haven flows.

Growth Data Supports Mid-Cycle View Sweden’s Q2 GDP expanded in line with forecasts, confirming resilience without triggering immediate policy recalibration. The absence of major releases across Denmark and Finland left markets focused on euro-area spillovers and energy price volatility. Overall, the week reinforced selective Nordic outperformance versus broader Europe amid continued data dependence.

Nordic Central Banks Watch

The Riksbank’s hold and subsequent comments from board member Hjelm on elevated inflation risks kept the tightening bias intact despite subdued July CPI YoY. Norges Bank received no new domestic data but faced indirect pressure from Brent’s weekly decline, which reduced near-term NOK support without altering the bank’s communicated path. Danmarks Nationalbank remained aligned with ECB parameters through the EUR/DKK peg, with no independent signals emerging. Bank of Finland continued to track ECB forward guidance, where the week’s subdued Nordic inflation prints and mixed Q2 GDP outcomes provided no fresh impetus for deviation from the current data-dependent stance.

The Week Ahead

Denmark’s Unemployment Rate release on August 31 will offer the first labor-market read since July, informing views on domestic demand resilience ahead of the next ECB-linked decision. German Import Prices data the same day may influence euro-area inflation expectations that feed directly into Bank of Finland and Danmarks Nationalbank assessments. Norway will monitor any follow-up commentary from Norges Bank officials on oil revenue dynamics after Brent’s sharp weekly drop. Sweden’s export sector remains sensitive to EUR/SEK moves near 11.11, with any renewed krona pressure likely to prompt further Riksbank signals on the tightening option. Broader euro-area releases mid-week will shape expectations for the upcoming ECB meeting and its implications for the Nordic policy cluster. Thin domestic calendars across the region mean external factors will dominate rate-path discussions through the coming quarter.

Risks & Themes

The week’s data leave the Nordic growth cycle in mid-phase with uneven momentum, as Sweden’s Q2 GDP print contrasts with subdued CPI and PPI readings. Brent’s decline introduces downside risk to Norway’s fiscal transfers and NOK valuation without yet shifting Norges Bank communications. Upside inflation surprises remain possible given Riksbank warnings, which could accelerate the next policy adjustment if subsequent prints exceed the July CPI level. Markets appear to underweight the persistence of krona weakness at USD/SEK 9.59, potentially mispricing the probability of renewed tightening signals before the next Riksbank decision.

Week in Review

Labor market shows resilience Poland’s labor-market data extended the run of steady prints and reinforced domestic demand as a growth driver. Hungary’s Monetary Council cited cooling inflation pressures when it lowered the policy rate.

Market infrastructure upgrades accelerate Poland secured developed-market reclassifications effective early September. Fitch retained the A- rating but kept a negative outlook on fiscal risks. NBP gold reserves rose after additional purchases.

External balances and energy prices dominate flows Turkey’s July trade balance is scheduled for release with consensus pointing to a narrower deficit. Brent crude declined, easing imported-inflation concerns across the region. Regional equity indices posted modest net gains amid low summer liquidity, with the BIST 100 closing at 14641.6.

Policy divergence remains contained The CNB, BNR and NBP left parameters unchanged, preserving the data-dependent stance across the four non-Hungary markets. EUR/HUF rose while EUR/PLN advanced, reflecting selective forint and zloty softening against the euro. The configuration leaves medium-term rate paths anchored until next week’s Turkish GDP and Polish flash CPI prints arrive.

Emerging Europe Central Banks Watch

The MNB lowered its policy rate, the first adjustment since the prior level, and signaled a slower subsequent pace of easing. The NBP left its policy rate unchanged and will next convene in early September after the Polish flash CPI print. The CNB, BNR and CBRT maintained parameters, preserving the data-dependent posture across the remaining four markets. No new forward-guidance language emerged from any of the five central banks during the week. Poland’s steady labor-market data and Hungary’s rate cut together reinforce a gradual easing trajectory for the MNB while leaving the NBP on hold. The configuration keeps medium-term rate paths anchored to incoming inflation and growth prints rather than pre-committed calendars. Regional curves responded with sharp yield compression, consistent with the MNB’s dovish tilt and the absence of surprises from the other four banks.

Data Review

Poland’s labor-market data matched the prior reading. The print offered no new labor-market surprise and left the NBP’s early-September policy decision on hold. Hungary’s Monetary Council cut the base rate, citing cooling inflation pressures while flagging a slower subsequent pace of easing. No high-impact releases emerged from the Czech Republic or Romania during the week. Turkey’s July trade balance carries a consensus deficit narrower than the prior print. Polish retail sales missed forecasts on weaker fuel purchases, highlighting consumption softness in one component. The developed-market upgrade reflects structural improvements rather than a single data beat. These outcomes keep the regional cycle in mid-phase, with inflation vigilance intact and no immediate shift in central-bank forward guidance. The data configuration supports a gradual rate path for the MNB while leaving the NBP, CNB and BNR on hold pending next week’s Turkish GDP and Polish flash CPI releases.

The Week Ahead

Monday brings Turkey’s Q2 GDP growth prints alongside the unemployment rate. Poland’s preliminary August inflation rate is also due on Monday and will set the tone for the NBP’s early-September decision. Tuesday features Hungary’s Q2 GDP flash estimate and a Polish 10-year bond auction. Wednesday carries Turkey’s August inflation prints. Central-bank speakers from the region are expected to comment on the new data flow, with markets focused on any revisions to growth or price trajectories. The Turkish GDP and Polish CPI releases carry the highest impact for rate-path expectations. Czech and Romanian calendars remain light, leaving external drivers such as Brent crude and EUR crosses as key transmission channels. The week concludes with limited scheduled events on Thursday and Friday, shifting attention to positioning ahead of September data.

Risks & Themes

This week’s data shifted the outlook toward greater differentiation, with Hungary’s rate cut opening a modest easing gap versus the NBP, CNB and BNR. Upside risks center on stronger Turkish GDP and contained Polish flash CPI that could support further regional bond rallies. Downside risks include any upside surprise in Turkish inflation or a reversal in Brent crude that re-ignites imported-price pressure. Market mispricing signals appear limited, with yields already reflecting the MNB move and equity positioning remaining light amid summer volumes. Volatility stayed subdued, with daily moves in the BIST 100 and iShares Poland below 1% on most sessions. Flow considerations favor selective duration extension in Hungary and Poland while FX carry trades remain range-bound. The configuration leaves room for modest underperformance in Polish equities if the developed-market upgrade fails to attract immediate inflows.

Cross-Asset

Equities posted modest net gains on thin volumes, with the BIST 100 rising 0.97% to 14641.6 while iShares Poland declined 2.34% to 43.48. Bonds rallied across the curve, sending Hungary’s 10-year yield lower and Poland’s 10-year yield lower. FX moves were contained, with EUR/PLN advancing 0.71% to 4.34 and EUR/HUF rising 0.75% to 364.85; EUR/CZK slipped 0.02% to 24.10 while USD/TRY gained 0.33% to 48.20. Commodities provided the largest external impulse, with Brent crude falling 4.42% to 88.1 and gold declining 2.39% to 4529.9. Daily equity moves included a BIST 100 gain on August 26 and an iShares Poland drop on August 27. The cross-asset configuration reflects energy-price relief feeding into lower regional yields while equity outperformance remained selective.

Global Context

Brent crude’s decline over the past five sessions eased imported-inflation pressure across energy-sensitive CEEMEA economies. Gold’s drop coincided with modest USD/TRY gains, limiting spillover into Turkish asset prices. Euro-area growth revisions remain a key transmission channel for regional FX flows, with no material change recorded in the last seven days. Geopolitical risks stayed contained, supporting the observed compression in CEE sovereign yields. Trade dynamics showed no new disruptions, leaving the narrower Turkish trade-balance consensus as the dominant external-balance signal for next week.

Week in Review

Commodity flows dominate price action. South African assets tracked external commodity moves rather than domestic releases, with gold climbing early in the week before retreating to close lower. The rand followed the metal, pushing USD/ZAR lower mid-week before closing the period higher. Brent crude fell over the same period, removing some imported inflation pressure.

Equity market resilience amid rotation. The JSE Top 40 advanced as mining names provided the main support while Naspers recorded a modest weekly increase. Platinum ended lower.

Absence of scheduled data leaves markets data-light. No high-impact South African releases occurred during the week, leaving the pending Trade Balance print as the sole domestic anchor. Markets absorbed the quiet calendar without shifting positioning ahead of month-end flows.

Infrastructure and harvest updates add color. The SARB announced payment-system reforms aimed at modernising clearing infrastructure, while a government estimate placed the 2026 wheat harvest below last year’s level, the smallest since 2019. These items received limited immediate market reaction.

Inflation and rate backdrop unchanged. July CPI kept the policy rate comfortably inside the target range and reinforced the data-dependent stance. Short-term rates held steady while long-term yields eased.

External risk sentiment provides the through-line. Global energy and safe-haven flows interacted with South Africa’s commodity exposure, producing rand strength early in the week that later moderated as gold gave back gains. The configuration left local markets sensitive to external price impulses rather than domestic growth signals.

SARB Watch

The South African Reserve Bank left the policy rate unchanged, consistent with July CPI sitting inside the target band. No MPC minutes or speeches were released during the week. The central bank instead highlighted operational reforms to the payment system, signalling focus on infrastructure modernisation rather than near-term parameter shifts. July inflation data and the absence of growth surprises reinforced the existing data-dependent framework ahead of the next decision. Persistent electricity constraints and rail bottlenecks continue to limit upside to activity forecasts without altering the inflation-targeting stance.

The Week Ahead

The August Trade Balance release on Monday carries medium impact and will be assessed against the prior surplus for signs of sustained mining and auto export strength. M3 Money Supply and Private Sector Credit year-over-year prints, also due Monday, will provide the first read on liquidity and credit momentum after the quiet prior week. These figures matter for the South African Reserve Bank’s assessment of domestic demand conditions heading into upcoming decisions. No central-bank communications are scheduled, keeping attention on whether the data sustain the current policy rate path. Later in the week, any follow-through on global commodity prices could influence rand volatility and imported inflation signals. The releases will help calibrate expectations for growth in coming quarters without shifting the inflation-targeting parameters.

Risks & Themes

Persistent rail and port constraints risk capping mining export volumes even as metal prices remain elevated, potentially narrowing the trade surplus. Load-shedding developments at Eskom could weigh on industrial output and credit growth prints next week. Upside to the rand would require sustained gold strength, while downside scenarios centre on renewed Brent advances that lift imported inflation risks. The market appears to underweight the cumulative effect of infrastructure bottlenecks on medium-term growth, leaving room for softer activity data to challenge the current policy-rate hold.

Week in Review

Inflation Persistence Australian July CPI rose above consensus expectations, while the RBA trimmed mean also advanced.

Activity Indicators Weaken Construction work done declined against forecasts, pointing to reduced building momentum.

Equity and Currency Moves The ASX 200 closed the week at 9092.3 after a 0.12% decline from the prior Friday, while AUD/USD held at 0.72 with a 0.16% weekly loss.

Commodity Backdrop Brent crude settled at 88.1 after a 4.42% weekly decline, and gold reached 4529.9 after a 2.39% drop, tempering imported price pressures.

New Zealand Market Performance The NZX 50 ended at 13768.18, down 0.82% for the week, as NZD/USD slipped to 0.59.

Policy Communication Steady RBA minutes and remarks from Deputy Governor Jacobs maintained the existing cash-rate framework without fresh signals.

Cross-Market Linkages BHP shares finished at 67.3 after a 0.27% weekly gain amid iron-ore support, while Bitcoin rose to 78801.0.

Data Dependence Reinforced Sticky inflation outcomes combined with the construction contraction left the RBA board positioned for ongoing vigilance ahead of its next meeting.

Regional Divergence New Zealand short-term rates moved lower, contrasting with Australian 10-year yields.

Week Arc Summary Overall the period showed inflation outcomes challenging consensus while activity data softened, sustaining a mid-cycle configuration without immediate policy recalibration.

ANZ Central Banks Watch

RBA minutes from the August meeting reiterated the board’s focus on incoming inflation and labour data while leaving the cash rate unchanged. Deputy Governor Jacobs comments added no new forward guidance beyond the existing data-dependent posture. July CPI and the trimmed mean reinforced the case for continued vigilance at upcoming decisions. In New Zealand the RBNZ maintained the prevailing OCR through the period, with the next decision and press conference scheduled to assess inflation persistence. The Australian construction contraction supplied additional evidence of cooling domestic demand that the RBA will weigh against the inflation overshoot.

The Week Ahead

Australian GDP growth quarter-over-quarter is due early in the period, providing a direct read on second-half momentum ahead of the next RBA meeting. The Ai Group Industry Index and building permits data will follow, offering early signals on manufacturing and housing activity. ANZ Business Confidence arrives as the first sentiment gauge before the RBNZ decision. The RBNZ OCR announcement and press conference will clarify the policy path in light of recent inflation data. Australian trade balance and speeches by RBA officials later in the week will shape views on export performance and policy tone. Company gross profits data will round out the domestic releases, helping assess corporate pricing power. These prints together will inform whether the RBA and RBNZ maintain their current parameters through coming quarters.

Risks & Themes

The July CPI outcome raises the possibility that inflation remains above target for longer, potentially delaying any RBA easing. A further construction work done contraction could deepen downside risks to domestic demand and growth in coming quarters. Brent crude after the weekly decline reduces near-term imported inflation pressure but leaves both economies exposed to renewed commodity spikes. Divergence between the RBA cash rate and RBNZ OCR could widen capital-flow volatility if inflation trajectories continue to differ. The data-dependent stance of both central banks leaves limited room for pre-emptive shifts, so any further consensus misses on GDP or business confidence could alter the balance of risks quickly.

Week in Review

Mainland, Hong Kong and Taiwan equities posted net gains for the five-day period ending August 28 as investors positioned for end-month activity data. Equity markets price stimulus expectations Mainland benchmarks advanced on thin volumes with the Shanghai Composite closing at 3,952.18 after a 1.81 percent weekly gain. Hong Kong’s Hang Seng Index finished at 25,584.79 for a modest 0.26 percent weekly advance. Taiwan’s TAIEX outperformed, climbing 3.51 percent to 46,331.45 as semiconductor demand remained resilient. Yuan stability and liquidity signals The PBoC set the daily reference rate while the offshore USD/CNY rate settled at 6.73, up just 0.07 percent on the week. USD/HKD held at 7.84 with no HKMA intervention required to defend the peg. Commodity price divergence Brent crude fell 4.42 percent to 88.10 while copper rose 0.91 percent to 6.66, consistent with mixed industrial demand signals. Gold declined 2.39 percent to 4,529.90. Beijing continued to frame uneven growth as evidence of technological resilience, with export strength masking domestic softness. Property deleveraging continued to weigh on credit growth, keeping expectations for measured PBoC liquidity support intact through month-end.

Greater China Central Banks Watch

The PBoC maintained its daily USD/CNY reference rate with no adjustment to policy parameters during the week. HKMA flagged bank scams and Northern Metropolis financing needs without altering liquidity operations or the peg at 7.84. CBC monitored cross-strait trade flows amid ongoing semiconductor supply-chain tensions. No central bank speakers delivered new forward guidance, leaving the medium-term rate path anchored to incoming data. The July CPI outcome reinforced expectations for measured liquidity support rather than outright easing. Property sector measures announced earlier continued to unlock presale funds without requiring immediate PBoC rate action. Overall the configuration sustains a data-dependent stance across the three central banks through the balance of the period.

Data Review

No high-impact mainland data releases occurred between August 24 and August 28, leaving markets to focus on positioning ahead of the August 30 NBS prints. Prior manufacturing and non-manufacturing PMI readings remained in contraction territory. July CPI confirmed subdued price pressures that align with the PBoC’s data-dependent approach. Export data continued to mask domestic demand softness. These prints will provide the first comprehensive gauge of August activity following the summer slowdown. The absence of fresh releases this week reinforced the view that policymakers are absorbing mixed signals without immediate recalibration. Property easing measures in Beijing and Shanghai began unlocking presale funds, yet credit growth remained constrained. Overall the data configuration points to a mid-cycle expansion where selective resilience coexists with persistent domestic demand weakness.

The Week Ahead

Attention centers on the August 30 release of NBS Manufacturing PMI, expected higher versus the prior reading, and Non-Manufacturing PMI also expected higher versus the prior reading. Ratingdog Manufacturing PMI follows on August 31 with consensus unchanged from the prior reading. These surveys will test whether manufacturing activity remains near contraction or shows early stabilization after the summer slowdown. On September 2 the Ratingdog Services PMI is due with consensus slightly higher versus the prior reading. PBoC liquidity operations may increase ahead of month-end, while HKMA aggregate balance data could provide peg-stability signals. Taiwan will monitor any updates on cross-strait trade and US tariff rhetoric. Market participants will also track Alibaba’s planned Hong Kong share raise for AI funding. Any downside surprise in the PMI prints would reinforce bets on additional reserve requirement ratio support before year-end.

Risks & Themes

Positioning remains cautious until the August 30 PMI prints confirm the extent of any manufacturing rebound. Downside risks center on further property deleveraging that could weigh on domestic demand and credit growth. Upside scenarios include stronger-than-expected non-manufacturing readings that would support selective equity flows into Hong Kong listings. Market mispricing signals appear in the divergence between export strength and persistent domestic softness. Volatility may rise around the PMI releases given thin volumes observed this week. Flow considerations favor Taiwan semiconductors while mainland developers remain sensitive to any further easing measures. Overall the configuration leaves room for modest outperformance in regional equities if data avoid material downside surprises.

Cross-Asset

Equities recorded net weekly gains with the Shanghai Composite up 1.81 percent to 3,952.18, the Hang Seng Index rising 0.26 percent to 25,584.79 and the TAIEX advancing 3.51 percent to 46,331.45. Fixed-income markets showed limited movement with China 10-year yields remaining stable amid thin turnover. USD/CNY closed at 6.73 after a 0.07 percent weekly increase while USD/HKD held at 7.84. Copper rose 0.91 percent to 6.66 on resilient industrial demand signals, whereas Brent crude fell 4.42 percent to 88.10 and gold declined 2.39 percent to 4,529.90. Bitcoin gained 1.33 percent to 78,787.53. Cross-asset pricing reflected positioning for the August 30 PMI releases rather than immediate policy shifts.

Global Context

Global commodity moves provided the main external impulse, with Brent crude declining 4.42 percent to 88.10 over the five-day period. US tariff rhetoric resurfaced in commentary around Chinese export gains, adding pressure on USD/CNY stability. Gold’s 2.39 percent decline to 4,529.90 reflected broader risk-on sentiment in developed markets. Cross-border spillovers remained limited as the yuan held near 6.73 and the Hong Kong peg stayed intact. Trade dynamics showed continued export resilience masking domestic weakness, consistent with the multi-week pattern of selective resilience.

Week in Review

Export Strength Offsets Confidence Weakness South Korea’s export data through the first 20 days of August showed semiconductor shipments higher year-on-year, extending the prior month’s overall export growth and reinforcing the case for tighter policy. KOSPI closed the week at 6788.88, up 1.37% from the prior Friday, with Samsung Electronics at 257000 and SK Hynix at 1653000. USD/KRW ended at 1375.67, 0.67% stronger on the week.

Policy Tightening Amid Mixed Sentiment The Bank of Korea delivered a 25bp hike after July CPI printed above the 2% target. Consumer Confidence Index declined and Business Confidence eased, both released in the days before the decision. KOSPI still advanced as semiconductor names led gains.

Inflation and Housing Focus Long-term Korean bond yields rose while short-term rates held steady, reflecting the tighter stance. Brent crude settled at 88.10 after a 4.42% weekly decline, providing some external relief, yet the central bank highlighted persistent domestic price pressures. The data arc showed export momentum confirming an upgraded 2026 growth outlook while household and corporate sentiment readings pointed to downside risks from higher borrowing costs.

BoK Watch

The Bank of Korea raised the policy rate after July CPI printed above target and amid rising home prices. Officials cited the need to address inflation risks from the AI chip boom and fiscal expansion plans. No speeches occurred in the week leading into the decision. The move followed the prior increase and aligned with stronger-than-expected export data that supported an upgraded growth forecast. Incoming inflation and housing indicators reinforced the data-dependent approach to upcoming decisions without altering the communicated bias toward vigilance.

The Week Ahead

Exports Year-over-Year data due August 31 will test whether semiconductor demand remains robust after the surge recorded earlier in August. S&P Global Manufacturing PMI Index follows the same day, providing a read on factory sentiment ahead of the next policy meeting. Inflation Rate Year-over-Year prints September 1 against the July outcome and will inform whether price pressures are broadening. These releases matter for the Bank of Korea rate path because they will show whether export-led growth continues to outpace softening domestic confidence readings. Foreign-reserve figures scheduled alongside will also clarify won valuation trends. Any sustained strength in exports could support the case for further tightening in coming quarters while softer PMI or inflation prints would reinforce a data-dependent pause.

Risks & Themes

The week’s data shifted the outlook toward a higher-for-longer policy rate path given the combination of CPI and housing pressures that prompted the hike. Upside risks center on continued semiconductor export momentum extending into 2027, which could sustain growth above trend and keep inflation above target. Downside scenarios include further declines in Consumer Confidence and Business Confidence if fiscal measures clash with the tightening mandate. Markets appear to underweight the persistence of domestic inflation signals relative to the export strength already visible in the August trade data.

Week in Review

Central Bank Divergence Defines Policy Tone Policy settings remained on hold across the region amid uneven growth signals and contained price pressures.

Equity and Currency Volatility Persists JCI closed the week at 6518.12. KLCI finished at 1725.88 and STI at 5699.93. USD/IDR ended at 17698.0, USD/THB at 33.13, USD/PHP at 62.23 and USD/MYR at 4.02.

Commodity Impulse Moderates Regional Pressures Brent crude closed at 88.1 and gold at 4529.9, easing imported inflation risks for the six economies.

Data Flow Remains Thin but Forward-Looking No major releases occurred during the week. External flows and commodity moves shaped market direction.

ASEAN Central Banks Watch

Central banks maintained current policy settings. Incoming leadership signals continued emphasis on currency stability alongside growth objectives. MAS next review remains scheduled for October. The week’s data provided limited new information on rate paths, leaving all six central banks in data-dependent mode ahead of upcoming decisions.

The Week Ahead

Indonesia’s August trade balance and inflation releases will provide the first high-impact prints for external balance and price assessments. Philippines inflation data follows and will inform the inflation trajectory after the recent policy adjustment. Vietnam industrial production and retail sales figures should highlight manufacturing momentum. No major releases are scheduled for Thailand, Malaysia or Singapore, leaving central banks focused on external developments and capital flow signals. The absence of policy meetings keeps attention on data outcomes and implications for rate paths.

Risks & Themes

Divergent growth and inflation dynamics across the region could widen policy differences in coming quarters. External balance data carry potential to influence currency stability if outcomes disappoint. Recent commodity price moves offer relief for net importers but remain vulnerable to reversal on external shocks. Equity markets showed limited reaction to commodity shifts, suggesting possible underpricing of activity signals on regional currencies. Extended policy pauses in some economies leave limited room for response if external demand weakens.

Week in Review

RBI liquidity operations dominate flows. The Reserve Bank of India ended its USD-INR swap scheme early, attracting inflows that lifted forex reserves. These operations coincided with a decline in USD/INR that settled at 95.36, down 0.36% for the period.

Equity consolidation amid external volatility. Nifty 50 closed the week at 24175.65, down 0.18%, while Sensex finished at 77264.51, down 0.14%. Daily swings reflected bank and metal sector weakness.

Commodity price relief supports the external account. Brent crude declined 4.42% to 88.1 over the week, while gold fell 2.39% to 4529.9. The softer energy print reduced imported-inflation pressure.

High-frequency indicators confirm domestic demand. Credit-card spending and India Inc sales growth showed resilience, with manufacturing leading the recovery. Non-petroleum imports continued to widen the trade deficit, yet overall external buffers expanded.

Policy support for rupee invoicing and digital payments. The authorities expanded rupee-based export rules and released UPI transaction data showing further migration from cash, reinforcing structural efficiency gains. No major data releases occurred during the week, leaving markets focused on RBI operations and the upcoming Industrial Production print.

Growth-forecast upgrade anchors the mid-year narrative. The RBI raised its FY27 growth projection, consistent with resilient corporate sales and monsoon rainfall above normal that supported kharif sowing. The configuration leaves the expansion on a steady path into the second half of 2026.

RBI Watch

The RBI’s August bulletin highlighted that high-frequency indicators point to continued strength in manufacturing and services despite external headwinds. Officials ended the foreign-currency swap scheme early and introduced a dollar-funding window that facilitated offshore issuance, signaling active liquidity management. The central bank’s FY27 growth forecast was lifted, reflecting domestic demand resilience. Industrial Production data due on August 28 will feed directly into the Reserve Bank’s assessment of Q2 momentum ahead of the next policy decision. No new forward guidance was issued, leaving the policy rate path dependent on the sequence of growth and inflation prints that follow.

The Week Ahead

GDP Growth Year-over-Year is scheduled for release on August 31, providing the first look at second-quarter expansion and shaping Reserve Bank of India views on the growth trajectory into coming quarters. The Current Account Balance for the June quarter follows on September 1 and will clarify whether the external surplus remains supportive of rupee stability. No other high-impact Indian data are calendared through September 4, so attention will turn to any additional RBI liquidity operations and updates on foreign-exchange reserve movements. These releases matter for the central bank’s upcoming decisions because they will update the balance between domestic demand strength and external price pressures. Officials will also monitor global commodity moves for any renewed imported-inflation impulse. The absence of immediate policy meetings keeps the focus on data-dependent calibration through the balance of the quarter.

Risks & Themes

The decline in Brent crude illustrates downside commodity risk that could further ease imported inflation, yet any reversal would quickly pressure the trade deficit already widened by non-petroleum imports. Forex reserves provide substantial buffer against external shocks, but sustained RBI intervention to defend the rupee risks draining rupee liquidity if inflows moderate. India Inc sales growth and credit-card spending point to resilient consumption, yet any shortfall in the August 31 GDP print could challenge the RBI’s upgraded FY27 forecast. Markets appear to underweight the possibility that softer Industrial Production could reinforce a hold on the policy rate for longer if inflation vigilance persists. Upside growth surprises would support the current expansion narrative, while renewed energy-price spikes remain the clearest downside scenario for the external account.

Week in Review

Equity resilience amid commodity cooling The BIST 100 posted a net 0.97 percent gain to 14,641.6. Daily closes remained above 14,500 throughout, indicating sustained domestic buying interest even as global energy prices retreated.

Lira stability versus cross-rate divergence USD/TRY rose 0.33 percent to 48.2 across the five sessions. EUR/TRY and GBP/TRY both declined 0.50 percent and 0.52 percent respectively, narrowing the lira’s effective depreciation against the euro bloc while Bitcoin’s 1.26 percent weekly gain offered little direct spillover.

Absence of domestic data releases The economic calendar contained no Turkish releases between August 24 and 28, leaving market participants to price the prior week’s global mid-cycle signals without fresh local confirmation.

Commodity impulse transmission muted Brent crude’s 4.42 percent drop to 88.1 reduced imported-energy pressure. The decline aligned with softer daily moves in Gold (TRY), which fell 2.39 percent, suggesting limited immediate pass-through to Turkish inflation expectations.

Cross-asset pricing consistent with mid-phase expansion EUR/USD’s 0.81 percent decline to 1.16 coincided with the lira’s modest USD gains, yet the BIST 100 still advanced, pointing to equity outperformance driven by local factors rather than broad EM risk-on flows. The configuration leaves the growth-inflation balance unchanged from the previous three weeks.

CBRT Watch

No Central Bank of the Republic of Turkey communications or minutes were released during the week. The policy rate therefore remained on hold with forward guidance unchanged from prior statements. The 0.33 percent weekly rise in USD/TRY and the 4.42 percent Brent decline together supplied no new signal that would alter the bank’s data-dependent stance ahead of the next meeting. Incoming GDP and inflation prints will be required to shift the balance of risks around the current rate path. Officials have previously emphasized vigilance on second-half activity and price developments, and the quiet week preserved that framework without modification.

The Week Ahead

Monday brings Turkey’s GDP Growth Quarter-over-Quarter, GDP Growth Year-over-Year, and Unemployment Rate, all due at 03:00 ET. These releases will update the growth trajectory into the second half and inform whether activity momentum supports the existing policy stance. Thursday’s Inflation Rate Month-over-Month and Year-over-Year prints will follow at the same time, providing the first post-Brent decline read on price pressures. The data will directly feed the Central Bank of the Republic of Turkey’s assessment of the inflation path ahead of upcoming decisions. Markets will therefore focus on whether the releases reinforce or challenge the mid-phase expansion narrative established over the past month.

Risks & Themes

A softer-than-expected GDP print could reinforce the view that activity is losing momentum, raising downside risks to the rate path. Conversely, an inflation surprise would highlight persistent price pressures despite the Brent decline. The lira’s limited 0.33 percent weekly move suggests markets are not yet pricing material policy divergence, leaving room for repricing if the data shift the growth-inflation mix. External commodity stability remains a key variable, as any renewed Brent advance would quickly transmit to Turkish inflation metrics. The configuration leaves the outlook balanced but sensitive to the four releases scheduled for the opening days of the next week.

Week in Review

Oil Price Dynamics Brent crude declined 4.42 percent week-over-week while WTI crude declined 1.89 percent week-over-week.

Equity Market Performance MSCI Saudi advanced 0.59 percent while Saudi Aramco declined 0.98 percent. MSCI Qatar posted the strongest regional gain at 1.43 percent. MSCI UAE declined 0.25 percent.

Diversification and Fiscal Signals Regional authorities continued to emphasize non-oil diversification metrics.

Cross-Asset Hedging Flows Gold declined 2.39 percent week-over-week. Bitcoin rose 1.31 percent week-over-week. Regional currencies remained anchored, with USD/SAR at 3.75 and USD/AED at 3.67.

Absence of Macro Releases No GDP, inflation, or labor data prints occurred in Saudi Arabia, UAE, Qatar, Kuwait, Oman, or Bahrain. Markets therefore priced the week solely on commodity and external headlines. The configuration left fiscal and external balance expectations unchanged.

GCC Central Banks Watch

GCC central banks released no statements or minutes during the week. The absence of domestic inflation or activity prints left the policy rate path data-dependent and unaltered. Regional authorities continued to emphasize non-oil diversification metrics. These announcements signal sustained focus on structural revenues rather than near-term rate adjustments. The data showed no deviation from the mid-cycle expansion stance observed in prior weeks, with officials absorbing the Brent decline without recalibrating guidance.

The Week Ahead

Monday brings German import prices and South African credit data that could influence global risk sentiment feeding into GCC equity flows. Tuesday features UK and euro-area releases that may shape external demand signals for GCC exports. Wednesday includes US activity indicators whose outcomes typically transmit through the dollar peg to local liquidity conditions. These releases matter because they will inform the balance of growth and external price pressures confronting GCC central banks ahead of upcoming decisions. Officials will assess whether the prior week’s oil move alters the inflation trajectory that has kept policy rates steady. The configuration sustains the data-dependent approach without injecting fresh signals.

Risks & Themes

The Brent decline introduces downside risk to fiscal revenue forecasts if the move persists into coming quarters. Equities decoupled positively from the oil move. Upside scenarios center on continued diversification momentum. A sustained oil price decline would test the tolerance for mixed prints that has characterized the mid-phase expansion.