August 11, 2025

“US CPI, UK GDP, and a US-Russia meeting in Alaska are the main events for this week. The dollar has stabilised as its post-payrolls lows for now, with markets gearing up for the penultimate round of inflation data ahead of the September meeting.”

Sam Cornford – Head of Trading

USD

Tomorrow’s US CPI inflation data and Friday’s Trump-Putin summit in Alaska are the two events to look out for this week. Headline inflation is set to tick up from 2.7% to 2.8% and the core measure is expected higher at 3.0%, though the market is still almost 90% sure that we will see a Federal Reserve rate cut in September given mounting concerns about the labour market. Any progress made at Friday’s meeting on Ukraine would help European FX and dampen support for the geopolitical safe havens (CHF, JPY, and probably USD). While oil prices have fallen in recent days on the back of some optimism about a ceasefire, the US offer for land concessions will not be backed by Ukraine unless Trump somehow forces them to do so. Also in the diary this week are the NFIB small business index, PPI inflation, and retail sales.

GBP

Sterling continues to outperform since the Bank of England’s surprisingly hawkish vote last Thursday. GBPUSD is sitting around 2.4% higher versus its trough on 1^st August. Chief Economist Huw
Pill warned on Friday that, although the downward path for rates is intact, we cannot rely on the quarterly pace of cuts being replicated going forward, arguing there is more uncertainty over the pace than there was before. Tomorrow’s wage growth and payrolls data will be an important input for that, where markets are looking for a -18K jobs figure following last month’s -41K print. Thursday’s Q2 GDP print is expected to be similarly disappointing at 0.1% q/q.

EUR

The Ukraine story and data points from the US and UK will move the euro this week, in the absence of much domestic data. The Trump-Putin meeting could theoretically provide some significant support for the euro, but that might take a monumental shift in either Zelenskyy’s or Putin’s positions in the negotiations. Putin’s repeated demands for territorial concessions and the demilitarisation of Ukraine have been the main blocker – Trump will hope that his secondary tariff threats might give him some leverage here.

Markets

Optimism around Ukraine appears to be a major factor in European stocks’ good performance towards the end of last week. The momentum is solid in the US, too, and a BofA monthly survey has indicated that ‘long Magnificent 7’ is by far the most overcrowded trade.

Main Economic Events (All Times CET)

8:00am: Norway CPI

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