Week Ahead Preview:
7th of July

Traders are closely watching the Reserve Bank of Australia’s interest rate decision at the start of the week. Inflation in Australia has remained stable at 2.4% since Q4 of last year, while economic growth slowed from 0.6% in Q4 to just 0.2% in Q1 this year. With inflation near the 2% target and economic momentum weakening, markets widely expect the RBA to cut interest rates by 25 basis points, from 3.85% to 3.60%. Investors will also closely monitor the RBA’s press conference for signals on future policy direction, as it plays a key role in shaping the Australian dollar’s performance against major currencies.

Meanwhile, the Reserve Bank of New Zealand is also set to announce its interest rate decision this week. New Zealand’s inflation rose from 2.2% in Q4 last year to 2.5% in Q1 this year. Although GDP contracted less sharply (improving from -1.3% to -0.7% over the same period) the economy remains in technical recession. This adds pressure on the RBNZ to continue easing policy. Accordingly, markets expect a 25-basis point rate cut, from 3.25% to 3.00%.

Investors are also awaiting the release of the minutes from the Federal Open Market Committee’s June meeting. The minutes will shed light on members’ economic assessments, the reasoning behind current policy decisions, and possible signals regarding future moves. A growing divide has emerged among FOMC members: some favour a rate cut as early as the July meeting, while others advocate caution, citing the need to evaluate the impact of proposed tariffs by the Trump administration, particularly on inflation. This suggests the possibility of delaying any rate cut until September. The minutes may offer insight into the depth of this division and help markets gauge the Fed’s likely path forward.

Economic Data Highlights (UAE time)

Monday, 7th of July

• GBP- House Price Index (Jun)
• EUR- Retail Sales (May)

Tuesday, 8th of July

• RBA Interest Rate Decision & Press Conference
• EUR- Germany Trade Balance (May)

Wednesday, 9th of July

• CNY- Inflation Rates (Jun)
• RBNZD Interest Rate Decision
• US Crude Stockpiles
• FOMC Minutes

Thursday, 10th of July

• JPY- Producer Price Index (Jun)
• Fed Members Waller and Daly speeches

Friday, 11th of July

• EUR- Germany Inflation Rates (Jun)
• GBP- Gross Domestic Product (May)
• GBP- Industrial & Manufacturing Production (May)
• CAD- Employment Change and Unemployment rate (Jun)