This week brings important inflation data for Australia and Japan, along with the US core PCE index. Markets on Monday are expected to start slowly due to a lack of economic data scheduled for the FX market.

Key releases include US consumer confidence and the Richmond manufacturing index on Tuesday, followed by Australia’s inflation data and Japan’s BoJ Core CPI on Wednesday. The US will also publish new home sales data that day. On Thursday, vital US reports include preliminary GDP, unemployment claims, and durable goods orders, while Friday will feature Tokyo’s Core CPI, Canada’s GDP, and various US releases, including the Core PCE Price Index.

In Australia, the CPI is forecasted to rise to 2.6% from 2.5%, with seasonal price declines expected to dampen monthly figures. Commonwealth government rebates may further ease electricity prices, contributing to expectations of continued disinflation.

For the US, new home sales are expected to decline to 677K from 698K, affected by high interest rates and lower builder confidence. The South faces challenges from recent hurricanes, although a gradual recovery in home sales is anticipated.

US core durable goods orders are projected to rise by 0.4%, with overall durable goods orders expected to increase 2.0%. Recent declines in durable goods orders reflect fluctuations in aircraft orders and potential stockpiling by businesses.

In Japan, the consensus for Tokyo’s core CPI is a drop to 2.3%, attributed to rising fresh food prices and service-sector costs. The Bank of Japan is monitoring price increases, particularly for rice, amid signs of economic recovery.

Canada’s GDP is forecasted to grow by 0.3% m/m and 1.5% annually, driven by consumer spending, although business investment remains weak. The resilient labour market and surprising inflation may influence the Bank of Canada’s rate decisions in March.

In the US, the core PCE price index is projected to rise by 0.3%, while personal income and spending are expected to show slight increases. The sharp drop in retail sales suggests a moderation in demand, but resilient income growth may support spending momentum in the coming months.

The next few days bring key inflation reports and economic figures that could shift market expectations. Australia and Japan will release new inflation readings, while in the US, the Federal Reserve’s preferred inflation gauge, the core PCE price index, is set for release. These reports will provide a fresh look at how inflationary pressures are developing in different parts of the world, with potential implications for central bank policy.

Monday is expected to be quiet due to a lack of major economic reports influencing currency markets. However, this calm will not last. US consumer confidence figures and the Richmond manufacturing index will be released on Tuesday. The survey-based confidence measure will give insight into how households feel about economic conditions and their future spending plans. Factory activity in the Richmond region will offer a gauge of how manufacturers are handling costs and demand pressures. Both indicators could sway market expectations if they come in much higher or lower than forecasted.

The pace picks up on Wednesday with inflation data from Australia and Japan. The Consumer Price Index in Australia is predicted to tick higher based on year-over-year comparisons. Seasonal price declines, however, may obscure this increase in the latest monthly figures. Government rebates designed to offset electricity costs could also play a role in tempering inflation, contributing to the broader disinflationary trend the country has experienced in recent months.

Additionally, Japan’s Bank of Japan (BoJ) will be watching the core Tokyo CPI, which often acts as a leading indicator for nationwide inflation. Forecasts point to a slower rate of core inflation this time, even as fresh food and service costs apply upward pressure. The BoJ will be paying close attention to how food prices, particularly rice, influence overall inflation as it considers future policy adjustments.

Meanwhile, in the US, a notable drop in new home sales is anticipated. Analysts expect a decline, with the figure sliding from 698K to 677K, reflecting ongoing challenges in the housing market. High borrowing costs have made home purchases more difficult, affecting builder confidence. The housing market in the Southern states remains in recovery mode following recent hurricanes, though a slower return to stronger sales activity is expected.

Markets will also digest a range of vital US economic reports on Thursday. Preliminary GDP figures should confirm the strength of US economic growth, while weekly unemployment claims will provide a view of labour market conditions. Additionally, durable goods orders will be closely followed. Core orders, which strip out volatile components like aircraft purchases, are expected to register a small rise of 0.4%. Overall orders should grow at a faster rate of 2.0%, but previous declines reflect shifting patterns in aircraft order volumes and possible inventory stockpiling among businesses.

Attention then turns to Canada, where fresh GDP data is anticipated. The economy is projected to post modest growth of 0.3% on a monthly basis, with annual growth standing at 1.5%. Strength in consumer spending is expected to be the main driver, although investment levels among businesses remain subdued. The Bank of Canada could take note of these figures in shaping its interest rate path, especially with inflation still presenting surprises.

Finally, Friday’s release of the US core PCE price index—widely regarded as the Federal Reserve’s preferred inflation gauge—could draw the strongest reaction. The index is estimated to increase by 0.3%, signalling that inflation is cooling but not fast enough to prompt a policy shift at this stage. Personal spending and income data, also due that day, could reveal how consumers are adjusting their behaviour in response to economic conditions. A recent sharp pullback in retail sales hints at softer demand, but the resilience of household income growth suggests spending momentum may hold up over time.

With all these reports ahead, there will be no shortage of new information to assess. Policymakers, financial markets, and traders alike will be watching closely for clues about where inflation and economic growth are heading next.