Week Ahead – All Eyes on Post-G20 and Tariff Fallout

Weekly Market Outlook (July 21st to 25th)

Markets were driven by a mix of U.S. inflation surprises last week, which led to a repricing of Federal Reserve policy expectations. The U.S. Dollar recorded its second consecutive weekly gain, marking the strongest back-to-back advance since May 2025.

June’s inflation data sent mixed signals—with CPI showing signs of cooling while PPI came in hotter than expected—highlighting persistent underlying price pressures amid growing tariff-related costs.

The U.S. Dollar Index (DXY) rebounded sharply from the 97.00 area, climbing toward 99.00 by the end of the week, fueled by renewed expectations that the Fed may hold rates higher for longer.

Meanwhile, the Japanese Yen weakened notably, with USDJPY rising above 148.00 for the first time since April. The move was partly driven by the stronger dollar but also by political stability following Japan’s Upper House election.

Week Ahead – All Eyes on Post-G20 and Tariff Fallout

Looking ahead, markets will be focused on a new wave of central bank signals and major economies respond on uncertainty surrounding Trump’s tariff policy, which remains a major wildcard that could trigger sharp market reactions.

The Post-G20 Summit outcome will be the key event shaping risk sentiment this week. Investors are closely watching how major economies—particularly the EU, Japan, and China—respond to recent U.S. tariff threats,

Amid this backdrop, markets will remain sensitive to any signals of retaliation or diplomacy, as well as shifts in tone from central banks in response to rising global inflation and trade uncertainty.

Key Events & Economic Data, Why It Matters?

While markets remain fixated on escalating trade tensions and the outcome of the G20 summit, several major economic data release this week could significantly influence sentiment across the global market.

1. EU & UK PMIs– July 24th

These surveys measure business activity in manufacturing and services. Weak readings, especially in services, may signal slowing economic momentum, where it could increase pressure on the European Central Bank and Bank of England to adopt a more dovish stance or consider further rate cuts later this year.

2. ECB Interest Rate Decision – July 24th

While no rate change is expected, markets will focus on the ECB’s forward guidance. Policymakers face weak growth and global trade uncertainty. Any dovish signals or hints of policy easing could impact the euro, especially amid rising trade uncertainty and economic growth risk.

3. Tokyo CPI – July 25th

As a leading inflation gauge for Japan, Tokyo CPI offers early insight into national price trends. A weaker-than-expected print could add pressure on the Bank of Japan to maintain ultra-loose policy. With the yen already weakening, inflation data may influence currency dynamics and future BOJ communication.

Key Takeaway for the Week

The U.S. Dollar appears poised for a stronger rebound, underpinned by persistent inflation and shifting Fed expectations. However, this week’s key events—including ECB guidance, PMI data, and Tokyo CPI—could shape the market sentiment this week, especially on the US Dollar.

A hawkish surprise may fuel further gains, while a lack of conviction or dovish signals could cap the rally. A clearer dollar trend may emerge in the days ahead.