The upcoming week will feature key economic releases including the US PCE, Australian and Tokyo CPI, and central bank minutes from the ECB and RBA. Other notable data releases include Canada’s GDP and activity data from Japan.
Monday sees the PBoC maintaining the Loan Prime Rates, whilst Tuesday will include RBA and Riksbank minutes. Reports indicate the RBA will show a 25bps rate cut with projections on inflation moderating. Similarly, the Riksbank’s minutes will be closely watched for inflation insights.
Wednesday Highlights
On Wednesday, Australian CPI data is expected to rise, possibly affecting RBA easing expectations. The same day, Nvidia will release quarterly earnings, with China-related risks potentially impacting guidance.
Thursday will feature the ECB minutes, maintaining rates with a data-dependent approach. Tokyo CPI on Friday may show a slowdown in inflation to 2.6%. Friday’s US PCE data, following recent CPI and PPI readings, will be crucial for assessing inflation pressures.
Canadian GDP for Q2 is expected to indicate slight growth, with BoC deliberating future steps amid mixed signs from economic activity and inflation. The broader economic picture remains cautious, with potential policy shifts dependent on upcoming data signals.
From our perspective on August 24, 2025, the week ahead presents several opportunities based on central bank actions and key data releases. We see the People’s Bank of China maintaining its cautious stance, with the market fully expecting a hold on the MLF rate tomorrow. Given that China’s latest official manufacturing PMI for July came in at 49.8, marking four straight months of contraction, we believe upside for China-exposed assets is limited, making it a good environment to consider selling call options on relevant equity ETFs.
The Reserve Bank of Australia sent a clear dovish signal with its rate cut earlier this month, a move that keeps pressure on the Australian dollar. Futures markets are currently pricing in another 40 basis points of cuts from the RBA by the end of 2025. Wednesday’s CPI report is the key event to watch, as any surprisingly high inflation reading could cause a sharp, short-term rally in the AUD as those rate cut bets are quickly unwound.
Nvidia Earnings and Market Strategies
All eyes will be on NVIDIA’s earnings this Wednesday, but the main focus will be on the company’s forward guidance concerning its China revenue. The stock has already rallied over 90% this year, so any hint of caution from management could trigger a significant pullback. With implied volatility for weekly options expiring after the report sitting above 120%, the market is braced for a massive price swing, suggesting that buying option straddles to play a large move in either direction is a viable strategy.
We do not expect any surprises from the European Central Bank’s meeting minutes on Thursday, as the bank appears to be firmly in a holding pattern. The latest flash inflation data for the Eurozone in July dipped to 1.8%, giving policymakers little reason to deviate from their data-dependent approach. This stable outlook suggests that range-trading strategies on the EUR/USD, such as selling out-of-the-money puts and calls to collect premium, should remain effective.
The most critical data point this week is the US PCE inflation report on Friday, which will directly influence the Federal Reserve’s decision next month. We remember the market volatility in late 2024 when a string of hot inflation reports forced the Fed to delay its easing cycle, and currently, fed funds futures are pricing in a 65% chance of a rate cut in September. If the core PCE number comes in hotter than the expected monthly rise of 0.26%, those odds will drop, likely strengthening the US dollar and putting pressure on equity index futures.
For Canada, the Q2 GDP data on Friday will be closely watched after the economy showed signs of stalling in the spring. With the Bank of Canada minutes revealing a debate on the need for more economic support, a weak GDP print would almost certainly cement expectations for a rate cut later this year. Traders should be prepared for increased volatility in the Canadian dollar, as a contraction would likely send the currency lower against the US dollar.
