Post-election week volatility has eased, yet this week is set to bring important economic data releases, especially with US Retail Sales, inflation prints and political developments shaping sentiment. Tuesday starts with the UK labor report and US NFIB data on optimism and hiring. Midweek, US inflation reports (CPI and PPI) will likely reveal new pressures, potentially impacting rate expectations. Meanwhile, Germany’s snap election debate gains momentum, with discussions on timing and potential coalition partners sparking intrigue.

Tuesday: UK labor data

The UK labor data release is scheduled for Tuesday this week. After last week’s employment change was discounted by the ONS due to uncertainties about sampling, this week’s print should also be taken with a grain of salt. Pay close attention to the PAYE data, which has been slowly but steadily trending downward.

Chart 1.a: Divergence mounting between ONS and PAYE data