(Reuters) – There is rarely a dull moment in markets and the week to come will be no exception, with make-or-break U.S. inflation data and tough questions over international financing for Ukraine – all against a backdrop of a fraught U.S. presidential race.

Earnings will be front and centre, as members of the “Magnificent 7” report their results, along with major banks.

Here’s your look at what’s happening in markets in the coming week, from Rae Wee in Singapore, Lewis Krauskopf in New York and Naomi Rovnick, Tommy Wilkes and Marc Jones in London.

1/GIVE PCE A CHANCE

    U.S. inflation data on July 26 will test growing market expectations that the Fed is all but certain to cut interest rates in the coming months.

    June’s personal consumption expenditures (PCE) price index is expected to have climbed 0.1% on a monthly basis, according to a Reuters poll.

The release of the PCE report comes after another inflation reading, the consumer price index, fell in June for the first time in four years. That cooler-than-expected report set off a rotation in equities and cemented market expectations that the Fed is primed to cut rates in September.

    Several days after CPI, Fed Chair Jerome Powell said second-quarter inflation readings “add somewhat to confidence” that the pace of price increases is returning to the Fed’s target in a sustainable fashion.

    Investors will also be watching corporate results, as Tesla and Alphabet feature in a busy week for earnings.

2/AD-VANCE WARNING

News that Donald Trump has chosen J.D. Vance as his running mate for November’s presidential election has reverberated particularly sharply in emerging markets and nowhere more so than Ukraine.

Trump has long-promised to broker an end to its war with Russia and in Vance he has picked someone who has publicly questioned whether supporting Kyiv is necessarily in the U.S.’ interests.

For markets, that is something to watch.

Ukraine has just proposed its first wartime hike in taxes and is intensifying talks on a $20 billion sovereign debt restructuring with the likes of BlackRock and PIMCO. Eastern European currencies are getting twitchy again.

The U.S. reducing its weapons and support would be a catastrophe for Ukraine. But a swift deal to end hostilities could mean the massive reconstruction effort starts far sooner than many had hoped, even if it would leave plenty of lingering doubts.

3/INFLATION TEST

The Tokyo inflation report on July 26 will be the final check-in on consumer prices before the Bank of Japan (BOJ) meets on July 31, where the prospects of a rate hike from the central bank remain a toss-up.

An acceleration in July’s inflation figures could feed expectations for further monetary policy tightening in the near term, though a slowdown would likely see those bets unwind and weigh on the yen.

Analysts say cost pressures from a weak yen, which has fallen some 10% against the dollar this year, could heighten the chance of inflation staying well above the BOJ’s 2% target, though that has also inadvertently hurt households.

While Tokyo’s latest rounds of suspected intervention have hauled the currency away from a 38-year low, any impact is likely to be short-lived until rate differentials with the U.S. narrow.

4/BANK ON IT

European banks’ run of improving profitability and rising share prices faces its latest test, as second-quarter earnings get going in earnest.

Key is net interest income – which banks have seen surge thanks to higher rates – as the European Central Bank looks to cut rates further and the Bank of England prepares to ease. Investors will also want to see how lenders are faring as political uncertainty intensifies – French bank shares fell sharply during recent elections.

A busy Wednesday sees Germany’s Deutsche Bank, Britain’s Lloyds BNP Paribas in France, Spain’s Santander and Italy’s UniCredit all update investors, with more banks reporting the following week.

Analysts say the read-across from U.S. firms that have already reported is that stronger investment banking revenues should boost lenders with large investment bank arms such as Deutsche and Switzerland’s UBS, but markets have little tolerance for interest income numbers that disappoint.

5/IN THE (EURO) ZONE

The euro zone economy is proving to be a huge dilemma for the European Central Bank, as overall growth has been sluggish, but strength in the dominant services sector, boosted by tourism, has kept inflation pressures uncomfortably high.

Flash purchasing managers’ indices out on July 24 will show if the ECB’s challenge is getting any easier.

The euro zone PMIs, based on business managers’ observations of price and demand trends, could be especially influential after the ECB held interest rates at 3.75% and resisted offering future guidance, saying it was “data-dependent.”

The central bank, which lowered borrowing costs for the first time in five years in June, does see inflation moderating.

Money markets are firmly pricing a September rate cut, supporting euro zone stocks, government bonds and the euro for now, but also raising the threat level of any PMI result that could shift the ECB’s view.

(Compiled by Amanda Cooper; Graphics by Vineet Sachdev, Prinz Matgulis and Pasit Kongkunakornkul; Editing by Hugh Lawson)

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