Summer will have to contend with quite a few big risk events over the next few weeks, with important economic data releases, central bank meetings and earnings season kicking into gear, all amid escalating tensions in the Middle East. The first major central bank gathering of this month begins with the ECB set to hold rates steady on Thursday after a rate hike last time around. But rate setters’ relief at last month’s sharp retreat in energy prices proved very short-lived following the recent escalation in the conflict, only highlighting the uncertainty ahead.

It looks like it will be a battle between the hawks and doves on the ECB Governing Council, with any clues about policy and rate hikes going forward in September being key for the euro and markets. That meeting brings with it the next quarterly staff economic projections, with current energy prices now back at the bank’s base case scenario from June. We note that situation was based on a total of at least two rate hikes and core inflation staying above the ECB’s 2% target. The euro has been consolidating its mid-June breakdown in recent weeks with prices still in a downtrend. Bulls would need to get above at least the 50-day simple moving average at 1.1529 to break this 10-week move.

Stock markets will eye up two blockbuster earnings reports from Alphabet and Tesla after the markets close on Wednesday. Amid tumult in the crowded AI and chip sector as questions linger about an AI bubble, the spotlight will be on Google’s parent booming AI capex. The hyperscalers’ investment plans have been at the heart of the current market rally, while also becoming other company’s revenue and supporting the broader US economy. Does the AI spending cycle have further to run? Some Wall Street economists think the current $800 billion of investment should rise to $1.2 trillion next year. But the risk is obvious that there is now more hesitation to spend, which could potentially see the Nasdaq fall to next major support around 27,742.

The Persian Gulf will dictate oil and energy prices, as gold teeters on major support around the key psychological $4,000 level. Brent appears to be in bullish consolidation mode around $85, before a potential push to $88 and the 50-day moving average. But much will likely depend on President Trump’s ‘escalate to de-escalate’ tactics which have given energy markets a stir, as central bankers watch on. The new UK PM Burnham may also be impacted by this volatility, as he battles with time, a parliamentary party to keep happy and a fiscal picture which may hamper his leadership and new policy agenda. 

In Brief: Major Data Releases of the Week

Tuesday, 21 July 2026

UK Jobs: Expectations are for the jobless rate to remain steady at 4.9% while private sector pay growth is trending lower. This is due to little sign of a turnaround in the struggling consumer services sector. BoE officials recently said the labour market had seen some further softening.

Wednesday, 22 July 2026

UK CPI: Consensus predicts the headline rate at 2.7% from 2.8%, core at 2.5% from 2.6% and all-important services at 3.5% from 3.7%. Lower petrol prices should help drag the headline lower. But CPI may rise in July as household energy bill hikes kick in. There’s around 35bps of BoE rate hikes priced in by year-end.

Thursday, 23 July 2026

Australia Jobs: Expectations are for a headline print of 15k, after the prior 40.3k. Unemployment is forecast to remain at 4.4%. Forward-looking surveys point to sluggish employment with possibly rising underemployment meaning there is some slack emerging.

ECB Meeting: The ECB is set to hold rates steady as there’s less than a 7% chance of a rate hike at this meeting with little evidence of second round effects. But hawks will be on their guard with the latest rise in energy prices, and there’s around 43bps priced in for 2026. A data dependent, meeting-by-meeting stance is likely. 

Friday, 24 July 2026

Eurozone & UK PMIs: Manufacturing is losing some of its steam across Europe, but strategic stockpiling is helping in the UK. Services activity is forecast to rise to a three-month high in the eurozone but could see the sharpest drop in three years in the UK.