After a bump in inflation in the first part of the year, New Zealand, like many other developed countries, is expected to have seen price pressures cool by mid-year. According to a Bloomberg News survey, we’re looking for the Q2’17 New Zealand CPI figure to come in at +1.9%, down from +2.0% in Q1 (y/y). The Reserve Bank of New Zealand is expecting choppy inflation figures, having said at their June policy meeting that “The increase in headline inflation in the March quarter was mainly due to higher tradables inflation, particularly petrol and food prices. These effects are temporary and may lead to some variability in headline inflation.” The headline reading might spark the New Zealand Dollar temporarily, but a sustained move is not eyed as the RBNZ continues to talk down its currency and temper expectations of significant policy changes in 2017.

Pairs to Watch: AUD/NZD, NZD/JPY, NZD/USD

07/18 Tuesday | 08:30 GMT | GBP Consumer Price Index (JUN)

The British Pound’s post-Brexit base effect weakness has almost worked its way out of the system, but its influence will linger at the upcoming inflation release. Consensus forecasts are calling for a +0.2% m/m increase (down from +0.3% in May) and a +2.9% increase (unchanged from May) (y/y). Likewise, core CPI is expected to hold at +2.6% (y/y). The Tuesday data release bears significant importance for the Sterling, as several Bank of England policymakers have expressed concerns of an “inflation overshoot.” In other words, if inflation continues to run higher above 3%, the BOE could be forced to raise rates. Currently, medium-term inflation expectations (5-year, 5-year inflation swaps) for the UK have been dropping, and were at their yearly low near 3.200% at the time this report was written.

Pairs to Watch: EUR/GBP, GBP/JPY, GBP/USD

07/20 Thursday | --:-- GMT | JPY Bank of Japan Rate Decision

The monthly Bank of Japan Monetary Policy Statement is expected to see rates remain at -0.10% with the 10-year JGB yield target unchanged around 0%. In order to boost inflation to a stable, target, level of 2%, the BOJ controls short-term and long-term interest rates via market intervention, while the central bank has also committed itself to increasing the monetary base until inflation hits target. At the end of the month, the central bank announces which government bond issues it will buy in the next month, with approximate purchase amounts and purchase dates. Consumer price inflation in Japan rose 0.4% in May 2017, in-line with market expectations but still well-below the BOJ’s +2% target. It’s also worth noting that as of the end of June 2017, the BOJ owned approximately 44% of all outstanding Japanese government debt. Expect the BOJ to retain the mantle of ‘most dovish G7 central bank’ for the foreseeable future.

Pairs to Watch: EUR/JPY, GBP/JPY, USD/JPY

07/20 Thursday | 01:30 GMT | AUD Employment Change & Unemployment Rate (JUN)

According to Bloomberg News consensus forecasts,the Australian employment increased by +15.0K in June after gaining+42.0K in May. May’s report was quite strong, with full time employment increasing by +52.1K over the period; the composition of jobs shifted from to more full time and fewer part time. Additionally, the unemployment rate is expected to bump higher to 5.6% from 5.5%. Despite the improved state of the labor market, uneven economic data appears to be a wrinkle in the outlook for the Reserve Bank of Australia, which noted recently that wage pressures aren’t strong enough to provoke a rate hike any time soon. Interest rate expectations (per overnight index swaps) show only a 12% chance of a hike by December 2017.

Pairs to Watch: AUD/JPY, AUD/NZD, AUD/USD

07/20 Thursday | 11:45 GMT | EUR European Central Bank Rate Decision

Even with the ECB set to meet this Thursday for the July meeting, a lack of new staff economic projections (SEPs) should keep a lid on interest rate speculation. As a result, with the ECB set to keep rates unchanged, traders should be focusing on President Mario Draghi’s press conference for clues as to what the central bank will do next.

A few more months of a stronger Euro, weaker energy prices, and persistent underperformance in inflation readings, and it’s easy to envision the ECB taking issue with the market’s hawkish interpretation of the policy adjustments being made. For now, it seems officials are suggesting that a step down in the QE program could come as soon as September. The key point is that it’s just not going to be this week. Due to the fact that the ECB is one of many central banks that have fallen into a predictable pattern of when policy action is most likely to arrive – only when forecasts are updated – this means that September or December will likely be when any significant issues are raised.

Pairs to Watch: EUR/GBP, EUR/JPY, EUR/USD