The Week Ahead: US, UK inflation; Netflix earnings

The flow of economic and company data is about to ramp up. The US and the UK will release consumer price index (CPI) readings on Tuesday and Wednesday, respectively. And perhaps more importantly, a fresh earnings season gets underway from Tuesday. As usual, the large-cap US banks kick things off, with JPMorgan, Citigroup and Wells Fargo set to report second-quarter results on Tuesday, followed by Bank of America, Goldman Sachs and Morgan Stanley on Wednesday. Below we focus on streaming giant Netflix, which on Thursday is expected to announce a more than 15% jump in Q2 revenue.

US June CPI

Tuesday 15 July
The rate of US inflation may be accelerating. Economists estimate that both headline and core CPI increased 0.3% month-on-month in June, up from 0.1% in May. The headline CPI rate is thought to have risen 2.6% in the year to June, up from 2.4% in May. Core CPI is expected to come in at 2.9% for June, versus 2.8% in May. 

Inflation has once again become a hot topic in the US, with many observers waiting to see if Donald Trump’s tariffs force businesses to pass higher import costs on to consumers. Although a baseline 10% tariff on most foreign imports to the US took effect in April, it remains to be seen whether additional, country-by-country tariffs will be imposed and, if so, whether they will prove inflationary. Uncertainty around these on-off tariffs has created confusion, making it hard to tell at this point what their lasting impact might be. 

The fallout from the tariffs boosted the euro against the dollar, but EUR/USD could soon start to pare those gains if the upcoming US CPI data confirms that inflation is on the rise again. Rising inflation is likely to prompt the Federal Reserve to keep interest rates elevated for an extended period, making dollar deposits more attractive. The euro is close to breaking below both a key support level at $1.168 and an uptrend that stretches back to the 3 March low. If EUR/USD slips below these markers, it could signal a significant shift in momentum, opening the door for further euro weakness and a potential decline towards $1.146.

UK June CPI

Wednesday 16 July
Since dropping to a low of 1.7% in September 2024, the UK’s headline rate of inflation has edged higher. Consensus estimates suggest that CPI increased 3.7% in the year to June, up from 3.4% in May. Despite rising prices, the market continues to expect up to two further interest rate cuts from the Bank of England in the second half of 2025. Wednesday’s CPI report may not alter those expectations.

With the dollar now starting to reassert itself, the pound could trend lower over the coming weeks. Early signs of this shift are already apparent, with GBP/USD slipping below its 10-day exponential moving average and breaching support at $1.36. A decisive break below the uptrend (the diagonal red line on the right of the below chart) would put GBP/USD at risk of further weakening, potentially sending the pair down towards $1.34.

Netflix Q2 results

Thursday 17 July
Analysts expect Netflix to report that second-quarter revenue increased 15.6% year-on-year to $11.1bn, with earnings rising 45% from the year-ago period to $7.07 a share. However, net subscriber additions are forecast to come in at 4.6 million, down 42.9% from the same period last year. Looking ahead to Q3, earnings are anticipated to increase 23.6% to $6.67, with revenue rising an estimated 14.6% to $11.3bn. The Nasdaq-listed streaming company no longer provides forward guidance on subscriber growth. 

The Netflix share price, up 41% year to date at approximately $1,250, could swing 6.7% higher or lower post-earnings, based on current options market pricing. The stock has enjoyed a significant rally since reporting Q1 results in April, and options positioning remains bullish ahead of the 18 July options expiration date. In fact, from an options perspective, the stock could rise towards $1,300 before encountering meaningful resistance.

However, the technical chart below also highlights the need for caution. The stock is breaking down from a rising, broadening-wedge pattern and is now trading below its 10-day exponential moving average. Additionally, the relative strength index (RSI) has fallen below 50. These indicators suggest further downside potential. The downside risk is that the stock could fall back to $1,105 – the start point of the broadening-wedge formation.

Economic and company events calendar

Major upcoming economic announcements and scheduled US and UK company reports include:

Monday 14 July

• China: June exports, imports and trade balance

• Germany: Monthly Bundesbank report

• UK: June like-for-like retail sales

• Results: Fastenal (Q2)

Tuesday 15 July

• Australia: July Westpac consumer confidence survey

• Canada: June consumer price index (CPI)

• China: Q2 gross domestic product (GDP), June retail sales

• Eurozone: May industrial production

• US: June CPI

• Results: Blackrock (Q2), Citigroup (Q2), JPMorgan Chase (Q2), Wells Fargo (Q2)

Wednesday 16 July

• Japan: June exports, imports and trade balance

• UK: June CPI

• US: June producer price index (PPI)

• Results: Bank of America (Q2), Goldman Sachs (Q2), Johnson & Johnson (Q2), Morgan Stanley (Q2), Progressive (Q2), Prologis (Q2)

Thursday 17 July

• Australia: June employment change, unemployment rate

• Eurozone: June harmonised CPI

• Japan: June CPI 

• UK: May employment change May unemployment rate, June unemployment benefit claimant count change

• US: Weekly initial jobless claims, June retail sales

• Results: Abbott Laboratories (Q2), Frasers (FY), GE Aerospace (Q2), Netflix (Q2), Ocado (HY), PepsiCo (Q2), Wise (Q1)

Friday 18 July

• Germany: June PPI

• US: July flash Michigan consumer sentiment index 

• Results: American Express (Q2), Charles Schwab (Q2)

Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.

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