Absolutely. Yeah. Thanks Matt. Yet another complex week for financial markets with DM Central Banks in the blackout period ahead of some very important meetings next week and a very light data calendar in the build-up or anticipation period ahead of those central bank meetings. Recent popular position to face some unwind pressure with downside missed to UK inflation, and a pushback against the Bank of Japan yield curve control adjustment, helping the dollar regain some ground. Now next week will be notable for the fact that we will get around 50% of the S&P reporting Microsoft, Google Meta, Amazon Intel Ford, GM, and Boeing among the names. But the clear focus for us will be the developed market, central bank action next week.
Firstly, in reverse order. We get to close the week with the Bank of Japan. Now, markets have been very keen to participate in the fallout from any adjustment from the Bank of Japan's yield curve control policy. However, the Bank of Japan have been increasingly clear that they see the current level of inflation, which is a significantly smaller breach of inflation targets than other developed markets central banks, remains transitory and that the Bank of Japan will, retain its maximalist easing policies. At least until they're more confident of hitting its price goal stably. Wording around the bank of Japan's thoughts on inflation and growth will be very important. But action much less likely in the near term in our view.

Secondly in the aftermath of the Fed, we get the ECB meeting next Thursday lunchtime. Our markets are fully priced for a 25 basis point hike, taking the policy rateto 3.75% but will likely be more interested in the signalling on rates beyond the summer recess. Core inflation edged higher in June after its final revision and is likely to stay elevated through July and August. In addition to that, the staff projections saw inflation above target at the forecast horizon with rates at 3.75%. Thus, we see it most likely that the ECB maintain a hawkish bias beyond July. The growth narrative would also be important, as will the debate around the future path of QT, plenty of variables for the market to focus on and an important event risk for next week.

Then lastly, but likely most importantly is the July FOMC, on Wednesday evening. Our markets are fully priced for a 25-basis point hike to a target range of five and a quarter to five and a half. But with no updated economic projections or DOTs to drive expectations, markets will be acutely focused on the wording of the statement and the inference of the press conference. Now, while 12 out of 18 Fed members implied a desire for at least one more hike, beyond July at the June summary of economic Projections, the recent downside missed to CPI, signs of continued rebalancing in the global goods and importantly labour markets, in conjunction with a maintained reference to the pace of policy action from the Fed leave us with a bias towards significantly more dovish interpretation of Wednesday's, FOMC. Even if the pronouncement of a peak in the US policy rate may need to formally wait until the September meeting alongside the renewed economic forecasts. We discussed these themes further in this week's blog but plenty to look forward two and to look out for from this week's developed market Central banks.