Investing.com - Global financial markets will focus on a big batch of U.S. economic data in the week ahead, with Friday's inflation report in the spotlight, for further clues on the timing of the next Federal Reserve rate hike.
Investors will also keep an eye out on a number of Fed speakers for any new insight on when and how the central bank plans to pare back its massive balance sheet.
Elsewhere, China is to release monthly trade and inflation data amid recent signs that momentum in the world's second largest economy remains strong.
In the U.K., traders will be awaiting a report on manufacturing production for further indications on the continued effect that the Brexit decision is having on the economy.
Meanwhile, market players await monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to assess global oil supply and demand levels.
Ahead of the coming week, Investing.com has compiled a list of the five biggest events on the economic calendar that are most likely to affect the markets.
1. U.S. inflation data
On a yearly base, core CPI is projected to climb 1.7%. Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less.
Rising inflation would be a catalyst to push the Fed toward raising interest rates in the months ahead.
In the stock market, struggling retailers, such as Macy's (NYSE:M), Nordstrom (NYSE:JWN), Kohl’s (NYSE:KSS) and JC Penney (NYSE:JCP), will release results in the week ahead, as earnings season begins to wind down. Media companies, like Disney (NYSE:DIS) and News Corp (NASDAQ:NWSA), as well as some recent IPOs, including Snap (NYSE:SNAP) and Blue Apron (NYSE:APRN), will also garner some attention.
Focus will also be on headlines coming out of Washington, even as Congress slows down for August recess. The investigation into U.S. President Donald Trump campaign's ties to Russia will remain on the agenda.
2. Fed speakers
A handful of Fed policymakers are due to make public appearances this week that may offer fresh clues on future monetary policy moves.
On Thursday, New York Fed President William Dudley will speak about wage inequality in his region. His comments will be scrutinized to gauge whether the Fed's view on low inflation appears to be transitory or a longer term problem.
Markets remain skeptical the Fed will raise rates in December, according to Investing.com’s Fed Rate Monitor Tool, due to worries over the subdued inflation outlook, but it is widely expected to start the process of reducing its balance sheet by September.
3. China trade figures
China is to release July trade figures at around 0300GMT on Tuesday. The report is expected to show that the country’s trade surplus widened to $46.08 billion last month from a surplus of $42.77 billion in June.
Additionally, on Wednesday, the Asian nation will publish data on July consumer and producer price inflation. The reports are expected to show that consumer prices rose 1.5% last month, while producer prices are forecast to increase by 5.5%.
China's economy grew a faster-than-expected 6.9% in the second quarter, matching the first quarter's pace, supported by solid exports, industrial production and consumption.
4. U.K. manufacturing production
The Office for National Statistics is to produce data on U.K. manufacturing production for June at 0830GMT (4:30AM ET) on Thursday, amid expectations for a flat reading, following a decline of 0.2% in the preceding month. Industrial output is forecast to inch up 0.1%, after falling 0.1% in May.
The Bank of England cut its forecasts for growth and wages last week, and appeared in no rush to raise interest rates, as it warned that Brexit was weighing on the economy.
5. OPEC/IEA monthly reports
The Organization of Petroleum Exporting Counties will publish its monthly assessment of oil markets at around 7:00AM ET (1100GMT) on Thursday. It includes figures on the state of global crude stockpiles for July.
On Friday, the International Energy Agency will release its own monthly report on global oil supply and demand.
The data will give traders a better picture of whether a global rebalancing is taking place in the oil market.
Oil traders will also be focused on a meeting of oil ministers from some OPEC and non-OPEC countries set for Monday and Tuesday in Abu Dhabi to discuss compliance to agreed upon global production limits that run through March 2018.
So far, the output deal has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, as well as a relentless increase in U.S. shale output.
Stay up-to-date on all of this week's economic events by visiting: http://www.investing.com/economic-calendar/