Absolutely, yeah, another fascinating week ahead for financial markets.

Focus swings back to the UK as the Bank of England assess the domestic complexities of the inflation growth trade off. August is a monetary policy report month and therefore, we get updated economic projections, simultaneously published minutes and a press conference ample opportunity, we would expect for them to communicate an accelerated pace of normalization or a 50 basis point rate hike to take the bank rate to 1.75%. Bailey has hinted that the governor's proposed course of action is likely to be a 50 basis point hike, and while there may be some dissent in favor of a smaller move, the UK data suggests growth has held in much better than the Euro zone comparison.

With the major GDP data surprising to the topside and July flash PMI more resilient, both noteworthy progressions and indicative of a growth backdrop that likely remains positive in the second half of this year. On that basis, with price pressures remaining elevated and set to gap higher with the energy price cap rise in October, the Bank of England will likely remain keen to head off any additional demand lead inflation pressure ahead of that. Now while the leadership campaign is largely a sideshow, from a monetary perspective, the fiscal loosening bias, especially from bookies favorite Liz Truss, will likely give the Bank of England further confidence in tightening in August. However, with bank rates subsequently at or even above the neutral rates following a 50 It's possible that the Bank of England may be more cautious or more attentive to growth sensitivities in the second half of this year.

Secondly, against the more specific focus of the UK, with the Bank of England Monetary Policy Committee deliberations, we also bring back into focus the broad global macro evolution we are currently experiencing. China Politburo meetings over the weekend might give some further clarification of the level and specific targets of support for Chinese growth in the second half of this year. To attain the best outcome, the replacement narrative for the 5.5% growth target made unattainable by COVID and the zero COVID policy in the first half of this year. Now the China PMI data at the start of the week will also be an important reference point for the platform upon which second half growth will be built. In Europe, the PMIs will be closely watched for further signs of energy sentiment and or costs directly impacting the real economy. And of course, the market will keep half an eye on the flow rate of natural gas through the Nord Stream one pipeline and surrounding Russia rhetoric.

Also in the US, the ISM will be closely watched after they're not always very correlated counterpart the PMI indicated troubling weakness in both services and manufacturing in its flash reading of last week.

But also in the US last week's FOMC highlighted the importance of the labor market on the underlying growth dynamic and proximity to recession made more opaque by a modestly negative first reading of US GDP this week, which we expected to be ultimately revised higher. Now there was no bigger focus on US labor market that's afforded by the monthly employment report the non-farm payrolls. analyst expectations are that we see 250,000 job gains in July, keeping the unemployment rate at 3.6%, likely significantly below the equilibrium level. Average hourly earnings are expected to slow to 4.9% year on year. The combination of indicators likely to show continued strength in the labor market and in wage growth. But against a 9.1% inflation rate negative real wages are still likely a drag on demand beyond the stimulus induced wealth effects. As we discussed in this week's blog, the combination of this week's data is likely to do little to remove either the Feds inflation risk premium or the markets growth risk premium that are embedded into us rate markets altogether. Another fascinating week to kick off the second half of the year, and for much of Europe, the summer holiday season.