Financial breakfast on September 25: Core inflation indicators in the United States and Europe are expected to decline, and more global central banks will announce interest rate decisions this week

Global policymakers are likely to breathe a sigh of relief this week as key fundamental indicators of consumer price growth slow.

In the United States, the PCE, the annual core measure that excludes food and energy from the Federal Reserve's preferred inflation measure, is likely to fall below 4% in August for the first time in nearly two years.

Meanwhile, the eurozone's own annual primary price growth indicator is expected to slow to 4.8% in September, the lowest in 12 months.

Fed and European Central Bank officials are likely to be reassured by the concurrent evidence of some data, following a week in which both central banks signalled that monetary tightening may have been completed or at least paused as they shifted their focus to maintaining high interest rates in an effort to curb inflation once and for all.

However, they do have reason to be cautious, as the prospect of crude prices rising to $100 a barrel could still drive prices higher.

Some recent increases in energy costs are already having an impact, with the Fed's preferred price index for total personal consumption expenditures expected to post one of the strongest gains this year on a monthly basis.

However, headline eurozone inflation data to be released on the same day is still likely to weaken sharply, falling to 4.5%, the lowest level in two years.

Anna Wong, an analyst at Bloomberg Economics, said: "The Fed's optimism is unlikely to be undermined by the data in the coming week. Despite the good performance of income and spending, we think personal consumption expenditure price index (PCE) inflation in August is likely to remain close to the Fed's 2 per cent target, which has been the case for three months in a row. However, in the consumer confidence report, we expect to see more signs of labour market weakness, which could raise some concerns."

In addition to the presence or speeches of the leaders of the Federal Reserve and the European Central Bank, decisions on interest rates will be made in countries from Hungary to Mexico, events that will keep investors busy.

United States and Canada

In the US, the PCE report is likely to be the last official data policymakers will see for some time before the government shutdown that is likely to begin on October 1, when data such as the jobs report were delayed.

Other data this week include new home sales, consumer confidence and durable goods orders. The Census Bureau will release its third estimate of second-quarter growth, along with a revised benchmark.

Federal Reserve Chairperson Jerome Powell will host a town hall meeting attended by educators, while his colleagues Neil Kashkari, Ostan Gulsby, Thomas Barkin, and John Williams are scheduled to speak at separate events.

Canada will release GDP data for July after preliminary data showed the economy was flat for the month, supporting the central bank's decision to stabilize interest rates at 5 percent.

Wage and job opening data are expected to show that the labor market continues to slow, even as wage growth remains strong.

Asia

Kazuo Ueda, governor of the Bank of Japan, and Shinichi Uchida, deputy governor, will speak on Monday.

This week, the world's third-largest economy will also release a series of data on Friday, including inflation, retail sales, industrial production, and labor market data.

This week, European Union Vice President Valdis Dombrovskis will visit China, and investors will also be closely watching China's PMI data, which began on Friday, for an update on China's economic slowdown.

Australia will release its latest inflation data on Wednesday and its latest retail sales data on Thursday, both of which will be included in the Reserve Bank of Australia's policy decision next week.

Meanwhile, Thailand's central bank is expected to continue raising interest rates on Wednesday, Singapore will release inflation data on Monday that could show a further slowdown, and Hong Kong will release trade data on Tuesday.

Europe, Middle East

Christine Lagarde, the president of the European Central Bank, will testify before the European Parliament on Monday, where last week's decision to raise interest rates again is likely to be addressed.

Other colleagues scheduled to speak in the coming days include Francois Villeroy de Galhau, governor of the Bank of France, and Philip Lane, chief economist of the European Central Bank.

While national inflation data in the region ahead of the Eurozone report will be a cause for concern, another bright spot will be Germany's latest Ifo Business Confidence Index.

Europe's largest economy may currently be contracting, and the index released on Monday will show whether there are any optimistic signs of improving growth.

Meanwhile, the UK surprised investors last week by leaving interest rates unchanged rather than hiking, with final second-quarter GDP data due on Friday.

Hungary's central bank is poised to cut its key interest rate by a full percentage point for the fifth straight month on Tuesday, a day after Czech officials are likely to remain on hold.

In Russia, the macroeconomic data released on Wednesday, including industrial production data, could see a strong rebound.

Saudi Arabia's foreign exchange reserves fell to their lowest level since 2009 in July.

Latin America

This week, Brazil's central bank on Tuesday released the minutes of its September 20 interest rate decision, cutting its key rate to 12.75%. On Thursday, the quarterly inflation report will update key scenarios and forecasts through the end of the year and 2024.

Also in Brazil, inflation figures for mid-September are likely to jump closer to 5 percent, and analysts expect unemployment to be near an eight-year low in August, with employment levels near record highs, all of which have yet to exacerbate wage pressures.

In Argentina, GDP data for July could turn negative for the fourth consecutive time as South America's second-largest economy slips into recession.

Chile's industrial production and retail sales should remain negative in August, but could provide signs of a super-regional rebound in 2024.

The Bank of Mexico and the Bank of the Republic of Colombia are all but certain to leave their key interest rates unchanged at the end of the week. Neither country is ready to start ending a record rate hike cycle, despite Colombian Finance Minister Ricardo Bonilla saying he will advocate for a rate cut.