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Macroeconomic & Geopolitical

Inflation Starts Trending Down (Slowly)

12 August 2021 - 3 min read

After weeks of markets pricing in our slower-growth scenario, the strong U.S. employment report kicked off a slight shift in the narrative. Meanwhile, cooling in U.S. CPI supports the transitory narrative. In Asia, eyes are on activity data amid the latest outbreak.


Arrows indicate consensus forecast compared to the previous period. Local dates of release.


  • Retail sales should remain strong amid support from U.S. shoppers. However, following the upward surprise in June, easing in government transfers could lead to some M/M volatility.
  • We will watch industrial production and business inventories to gauge if and how supply is catching up with demand.


  • U.K. inflation print for July will be released Wednesday, August 18. After the Bank of England’s dovish (on negative rates) and hawkish (on earlier tapering) announcements last week, any major surprise to the consensus 2.5% headline number will likely reverberate through sterling markets.

Asia Pacific

  • China activity data for July is likely to continue moderating. The latest outbreak will also likely drag on retail sales, particularly catering/restaurants.
  • Japan 2Q21 GDP should be buoyed by a robust external sector. Meanwhile, household spending is likely to have been dragged down by restrictions during the AprilMay viral wave.

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