Week commencing 17 August 2026

Wall Street gains as ASX 200 loses momentum

United States (US) equity markets are poised to finish the week higher after cooler-than-expected producer price data further eased concerns about a September rate hike and helped the S&P 500 push to a fresh record close. The softer producer price index (PPI) print, coming on the heels of a tame consumer price index (CPI) reading earlier in the week, pushed market pricing for the first Federal Reserve (Fed) hike fully into 2027 and lifted the odds of the central bank staying on hold next month. Relatively stable oil prices and a solid run of earnings reports also provided support, keeping risk appetite intact heading into the weekend.

Closer to home, the ASX 200 is on track to finish the week about 1.5% lower near 9120. After a strong start to the August reporting season that saw the index storm to a fresh record high of 9296.7, momentum has flagged as earnings season threw up more misses than beats. Weakness across the financials, industrials and telecommunications sectors outweighed gains in utilities, health care and energy, leaving the local market looking a little more subdued as the week draws to a close.

The week that was: highlights

• Headline US inflation eased to 3.4% year-on-year (YoY) in July, meeting consensus forecasts and cooling slightly from the 3.5% reported in June
• The US core CPI matched expectations with a 0.2% month-on-month (MoM) increase, which helped bring the annual core rate down to 2.5% from 2.6% prior
• US PPI came in softer than expected in July, with the annual rate easing to 4.7% – well below the previous 5.5% and under the 4.9% expected
• Core PPI also cooled, with the annual rate falling to 4.2% from 4.7% previously
• US existing home sales for July reached 4.06 million, slightly exceeding the consensus forecast of 4.05 million despite a 1.7% MoM decline
• The US monthly budget deficit widened significantly to $432 billion in July, far exceeding the projected $346 billion shortfall
• China's headline inflation eased to 0.5% YoY in July, falling short of the 0.8% consensus and the 1% reported previously
• Staying in China, factory gate prices continued to cool as the PPI fell to 3.5% YoY, coming in below the 3.8% forecast and the 4.1% prior reading
• Japan's current account balance unexpectedly swung to a deficit of ¥923 billion in June, marking a massive miss against the projected ¥1512 billion surplus
• The United Kingdom (UK) economy grew by 0.4% in the second quarter (Q2), matching expectations, while the annual gross domestic product (GDP) growth rate rose to 1.2% to exceed the 1.1% consensus
• UK monthly GDP for June surprised to the upside with a 0.3% MoM gain against forecasts of a flat reading, supported by a 1.7% jump in business investment
• In contrast, UK industrial production fell -0.2% MoM in June versus consensus forecasts for a 0.1% rise, while manufacturing production slumped -0.5% against an expected -0.2% dip
• UK retail performance softened in July as British Retail Consortium (BRC) retail sales grew by just 1% YoY, missing the 1.5% consensus forecast and the 1.7% prior gain
• The Reserve Bank of Australia (RBA) left the official cash rate unchanged at 4.35% during its August meeting, a move that was widely anticipated by the market
• Australian business sentiment remained subdued in July, with the NAB business confidence index holding steady at a reading of -6
• commodities:WTI|WTI crude oil] rose 4.02% this week to $81.32.
• The US dollar index (DXY) rose 0.32% to 99.92.
• Bitcoin is trading marginally lower this week at $63,401
• Gold is trading marginally lower this week at $4324
• Wall Street's gauge of fear, the volatility index (VIX), eased to 14.64 this week from 14.89 the previous week.

Key dates for the week ahead

Australia & New Zealand

• AU – Westpac Consumer Confidence: Tuesday, 18 August at 10.30am AEST
• AU – RBA Hauser speech: Wednesday, 19 August at 12.45pm AEST
• AU – Labour Force: Thursday, 20 August at 11.30am AEST

China & Japan

• JP – Q2 GDP (preliminary): Monday, 17 August at 9.50am AEST
• CN – House Price Index: Monday, 17 August at 11.30am AEST
• CN – Industrial Production: Monday, 17 August at 12.00pm AEST
• CN – Retail Sales: Monday, 17 August at 12.00pm AEST
• CN – Fixed Asset Investment: Monday, 17 August at 12.00pm AEST
• CN – Foreign direct investment (FDI) (YTD): Monday, 17 August
• CN – Loan Prime Rate decision: Thursday, 20 August at 11.15am AEST
• JP – Inflation Rate (CPI): Friday, 21 August at 9.30am AEST
• JP – S&P Global Manufacturing PMI (flash): Friday, 21 August at 10.30am AEST
• JP – S&P Global Services PMI (flash): Friday, 21 August at 10.30am AEST

United States

• US – Building Permits: Tuesday, 18 August at 10.30pm AEST
• US – Housing Starts: Tuesday, 18 August at 10.30pm AEST
• US – FOMC Minutes: Thursday, 20 August at 4.00am AEST
• US – Initial Jobless Claims: Thursday, 20 August at 10.30pm AEST
• US – S&P Global Manufacturing PMI (flash): Friday, 21 August at 11.45pm AEST
• US – S&P Global Services PMI (flash): Friday, 21 August at 11.45pm AEST

Europe & United Kingdom 

• UK – Unemployment rate: Tuesday, 18 August at 4.00pm AEST
• EA – ZEW Economic Sentiment: Tuesday, 18 August at 7.00pm AEST
• UK – Inflation rate (CPI): Wednesday, 19 August at 4.00pm AEST
• UK – Retail Sales: Friday, 21 August at 4.00pm AEST
• EA – S&P Global Manufacturing PMI (flash): Friday, 21 August at 6.00pm AEST
• EA – S&P Global Services PMI (flash): Friday, 21 August at 6.00pm AEST
• UK – S&P Global Manufacturing PMI (flash): Friday, 21 August at 6.30pm AEST
• UK – S&P Global Services PMI (flash): Friday, 21 August at 6.30pm AEST

Key events for the week ahead

AU: Labour force

Date: Thursday, 20 August at 11.30am AEST

Last month, the June employment report delivered a stronger-than-expected outcome, with the number of employed people rising by 76,300 – well above the +15,000 consensus forecast. At the same time, the unemployment rate held steady at 4.4%, while the participation rate climbed to 67.0% from 66.7%.

At its Board meeting this week, where the RBA kept rates on hold at 4.35% for a second consecutive month, the Bank noted that 'labour market conditions have eased by a little more than expected in recent months', while leading indicators pointed to only limited further easing in the near term. In the updated forecasts that accompanied the decision, the RBA revised its unemployment rate projections higher and now sees the jobless rate rising to 4.5% by the end of 2026 and peaking at 4.8% by mid-2028.

Looking ahead to the July update, the preliminary forecast is for a modest employment increase of around 10,000, with the unemployment rate likely to hold steady at 4.4%.

A softer-than-expected number – particularly a rise in the jobless rate toward 4.6% – would reinforce the view that the labour market is loosening in line with the RBA's updated projections. Conversely, a strong print would keep the tightening risk alive ahead of the RBA's next Board meeting in September.

The Australian rates market is set to finish this week pricing in 3 basis points (bp) of tightening for the RBA's September Board meeting, with a cumulative 13

bp of rate hikes priced before year-end.

Australian unemployment rate chart

JP: Inflation rate (CPI)

Date: Friday, 21 August at 9.30am AEST

Last month, Japan's headline CPI rose 1.7% YoY in June, up from May's 1.5%. Core CPI (excluding fresh food) rose 1.6% YoY, picking up from 1.4% and remaining below the BoJ's 2% target for a fifth straight month as government fuel subsidies continued to offset some of the pressure from higher energy and food costs.

Next week's July inflation print is expected to show a further modest firming, with consensus looking for a slight rise in both the headline and core measures. Fresh food, energy prices and ongoing pass-through from earlier wage gains and import costs are likely to provide the main upward impetus.

The data will be closely watched for signs that underlying inflation is beginning to broaden more convincingly, which could allow the BOJ to pull a rate hike forward into October – or, even better for the yen, into September.

US core inflation rate chart

US: S&P Global composite PMI (flash)

Date: Friday, 21 August at 11.45pm AEST 

In the latest reading, the S&P Global US composite PMI rose to 54.5 in July from 51.9 in June, exceeding the preliminary estimate of 53.6 and marking an eight-month high. The Composite is a weighted average of the Manufacturing and Services indices, with Services carrying the heavier weighting given its much larger contribution to US GDP.

Looking at the two components, the final Services PMI was revised higher to 54.6 (from a flash reading of 53.6), while Manufacturing eased slightly to 53.8. The improvement was therefore driven largely by the service sector. Services firms reported the strongest rise in new business since November, helped by a temporary lift from FIFA World Cup and Independence Day spending, plus higher investment in sales, marketing and product development. New work came mainly from domestic clients, while export orders fell sharply. Manufacturing growth, by contrast, slowed to a four-month low on softer new orders and longer supplier delivery times.

August's flash PMI readings will offer an early gauge of whether the mid-year acceleration in US business activity is being sustained. The US rates market is set to end the week pricing in 9 bp of hikes for the September meeting and a total of 23 bp of Fed tightening by year-end.

US S&P Global composite PMI chart

US: Q2 earnings season

The US Q2 2026 earnings season continues next week, with the schedule kicking off with Fabrinet on Monday, followed by a busy Tuesday featuring Home Depot, Baidu, and Toll Brothers. The retail and tech focus intensifies on Wednesday with reports from Target, Lowe's, TJX, and Analog Devices. This momentum carries into Thursday with Walmart, Alibaba, NetEase, and Deere & Co, as well as Ross Stores, before BJ's Wholesale Club rounds out the week on Friday.