A number of countries see second quarter GDP releases while the flash July PMI data for the US, eurozone and Japan will provide early insights into the health of global economies at the start of the third quarter. Markets will also be on tenterhooks ahead of the latest US Fed policy meeting. Other key data highlights include US home sales and durable goods orders, as well as inflation numbers for Germany, France, Spain and Japan.

The Fed meeting next week is likely to be one of little action. However, any rhetoric will be gleaned for insights into policymakers' appetite for any further tightening of policy. Analysts are generally expecting the central bank to wait until September to outline plans on how it will start to unwind its $4.5 trillion balance sheet, and until the fourth quarter before announcing the third interest rate hike of the year.

What could however sway the outlook for policy-making decisions is the extent to which US GDP has rebounded after a weak first quarter. A flow of disappointing US official data has come into line with relatively subdued PMI readings, which since April have indicated that economic growth may have failed to recover to any substantial degree in Q2. The flash July PMI data will therefore play a crucial role in gauging the health of the economy at the start of the third quarter, and thereby provide further clues as to the direction of future monetary policy.

Meanwhile, eurozone PMI survey numbers signalled that second quarter growth was running at its fastest for six years and at a level historically consistent with a tightening bias at the ECB. But the recent easing in inflationary pressures and a slight dip in the June numbers has held back the hawks, thus increasing the focus on the release of flash PMI data for July.

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