Oil concerns return

US equities moved lower for the week as concerns about the potential returns on huge artificial intelligence investments and a sharp rise in oil prices weighed on investor sentiment. The oil move also contributed to higher Treasury yields and increased market expectations for Federal Reserve rate hikes.

Over in Europe, the European Central Bank left rates unchanged as expected, following a hike in June, markets expect another hike in September. In the UK, inflation slowed to 2.6% in June, the lowest since March 2025, a boost to new Prime Minister Andy Burnham as he attempts to tackle cost of living issues.

Last week's highlights

	S&P Global PMIs (24/07) - S&P Global Composite PMI improved to 53.6 in July.
	ECB Rate Decision (23/07) – Left rates unchanged as expected, following a hike in June. Markets expect another hike in September.  Eurozone PMIs (24/07) - S&P Global Flash Eurozone Composite PMI posted 51.9 in July, up from 50.0 in June, indicating a bounce in business activity during July.
	UK CPI (22/07) - UK inflation slowed to 2.6%, lowest since March 2025, a boost to new PM Andy Burnham as he attempts to tackle cost of living issues.
	People’s Bank of China announcement (24/07) - China's central bank will inject 2.1tn yuan of short-term liquidity via its new overnight reverse repo tool, introduced in June to strengthen liquidity management and align policy operations with global peers.

This week, investors will be paying attention to several central bank meetings and mega cap earnings. The Federal Reserve will meet and are expected to leave rates unchanged as June’s inflation data came in well below forecasts, and labour market figures were softer than anticipated. The Bank of England will also meet with markets expecting no change in rates. Finally, the Bank of Japan will meet and are expected to hold rates steady. On the earnings side, Microsoft, Meta, Apple & Amazon are among the names reporting. 

What's on the radar

	FOMC Meeting (29/07) Core PCE Price Index (30/07)
	Eurozone CPI – July preliminary (31/07)
	Bank of England Meeting (30/07)
	Bank of Japan Meeting (31/07) China Manufacturing PMI (31/07)

Chart of the moment - On the Warsh path?

Source: Bloomberg as of 27/07/2026. Note: The dashed line represents market expectations for the future path of central bank policy rates.

• Markets are now expecting interest rate hikes in the US, Eurozone & UK before year end. 
• The Federal Reserve appears committed to delivering price stability. If inflation peaks in the near-term and moves lower, this hawkish narrative will be difficult to maintain, however.
• The European Central Bank held rates steady last week after hiking in June while the Federal Reserve & Bank of England are expected to leave rates unchanged this week.