In the coming week, global financial markets will focus on several important central bank meetings, including those of the U.S. Federal Reserve (Fed), the Bank of England, and the Bank of Japan. Inflation data from the U.K. and Japan, as well as economic activity data from the U.S. and China, will also be closely monitored.

This week, central banks in Switzerland, Norway, Sweden, Turkey, and the Philippines will also convene for rate decision meetings. Moreover, geopolitical developments in the Middle East, particularly Israel's strikes on Iranian nuclear facilities leading to stock market downturns and soaring oil prices, may further affect market sentiment and the rate decisions of various countries' central banks.

Here are the highlights for this week:

1. U.S. Federal Reserve Holds Steady, but Rate Cut Expectations Persist: The U.S. Federal Open Market Committee (FOMC) meeting will take place mid-week. Despite pressure from President Trump for a rate cut, and a Consumer Price Index (CPI) report falling short of expectations, the Fed is widely expected to keep the federal funds rate unchanged. This is largely due to inflation rates still above the target (2.4%) and the uncertainty around the potential impact of tariffs on prices. Additionally, the U.S. labor market continues to show resilience, as confirmed by recent S&P Global U.S. Purchasing Managers' Index (PMI) data and official labor market updates.
2. Bank of England Rate Decision: The Bank of England is set to meet on Thursday to decide on interest rates, with expectations to maintain the benchmark rate at 4.25%. However, based on May’s PMI data, the U.K. economy is showing signs of sluggish growth and easing inflation pressures, indicating a clear tendency for the BoE to consider a rate cut.
3. Bank of Japan’s Rate Decision and Economic Challenges: The Bank of Japan will also hold a monetary policy meeting. Although market expectations are for its stance to remain unchanged until later this year, the Bank faces greater challenges in its determination to maintain interest rates amid deteriorating economic trends.
4. U.S. Key Economic Data Releases: Retail sales and industrial production figures for May will be released on Tuesday, key indicators of consumer spending and manufacturing activity.
5. China Economic Data as a Focus: To gain insight into the impact of trade disruptions, industrial production and retail sales data from China will be closely watched.