Inflation surprise (upside) Core inflation is steady, so the upside-surprise channel is quiet. It would fire on a core reading ≥0.2pp above the prior — watch it because that is what forces a central bank to stay restrictive and pressures the longest-duration assets first.
Inflation surprise (downside / disinflation) Core inflation isn't cooling fast enough to trigger the disinflation channel. A fall of ≥0.2pp would fire it — worth watching because it is the cleanest tailwind for long-duration growth and government bonds.
Monetary easing (rate cut) The policy rate is on hold, so the easing channel is dormant. A cut would fire it — it matters because the first cut of a cycle typically broadens a rally and pressures the currency.

China

No active mechanism this week — the standing read above carries the bloc.

What would change the read

Growth acceleration (expansionary PMI) Manufacturing isn't both expanding and accelerating, so the growth-acceleration channel is dormant. A rising PMI back above 50 would fire it — it matters because it's the signal to rotate from defensives toward cyclicals.
Growth slowdown (deepening contraction) Manufacturing is not both below 50 and falling, so the deepening-contraction channel is dormant. It fires when a sub-50 PMI turns lower — that is the trigger for the defensive rotation and a bid for duration (a sub-50 PMI that is *rising* is the trough channel, M13, not this one).
Long-end yield spike / term-premium rise The 10-year yield isn't spiking, so this channel is dormant. A jump of ≥0.1pp would fire it — watch it because it compresses the highest-multiple growth names and long bonds fastest.

Euro area

No active mechanism this week — the standing read above carries the bloc.

What would change the read

Monetary easing (rate cut) The policy rate is on hold, so the easing channel is dormant. A cut would fire it — it matters because the first cut of a cycle typically broadens a rally and pressures the currency.
Monetary tightening (rate hike) The policy rate is steady, so the tightening channel is dormant. A hike would fire it — watch it because it hits long-duration growth, long bonds, and gold first.
Growth acceleration (expansionary PMI) Manufacturing isn't both expanding and accelerating, so the growth-acceleration channel is dormant. A rising PMI back above 50 would fire it — it matters because it's the signal to rotate from defensives toward cyclicals.

Japan

No active mechanism this week — the standing read above carries the bloc.

What would change the read

Inflation surprise (upside) Core inflation is steady, so the upside-surprise channel is quiet. It would fire on a core reading ≥0.2pp above the prior — watch it because that is what forces a central bank to stay restrictive and pressures the longest-duration assets first.
Inflation surprise (downside / disinflation) Core inflation isn't cooling fast enough to trigger the disinflation channel. A fall of ≥0.2pp would fire it — worth watching because it is the cleanest tailwind for long-duration growth and government bonds.
Monetary easing (rate cut) The policy rate is on hold, so the easing channel is dormant. A cut would fire it — it matters because the first cut of a cycle typically broadens a rally and pressures the currency.

The dataL3

United States

Indicator	Current	Prior	Δ	As of
CPI (YoY)	1.34	2.00	-0.66 ▼	2010-07-01
Core CPI	0.08	0.10	-0.02 ▬	2010-07-01
Core PCE	1.47	1.56	-0.09 ▬	2010-07-01
Policy rate	0.25	0.25	+0.00 ▬	2010-07-11
GDP	3.10	2.70	+0.40 ▲	2010-07-01
PMI (mfg)	56.20	59.70	-3.50 ▼	2010-07-01
PMI (svc)	53.80	55.40	-1.60 ▼	2010-07-06
Unemployment	9.50	9.40	+0.10 ▬	2010-07-02
10Y yield	3.07	3.04	+0.03 ▬	2010-07-09
2Y yield	0.63	0.63	+0.00 ▬	2010-07-09
2s10s slope	2.44	2.41	+0.03 ▬	2010-07-09
FX vs USD	n/a

China

Indicator	Current	Prior	Δ	As of
CPI (YoY)	2.90	3.10	-0.20 ▼	2010-07-01
Policy rate	n/a
GDP	n/a
PMI (mfg)	51.20	52.10	-0.90 ▼	2010-07-01
PMI (svc)	58.80	58.10	+0.70 ▲	2010-07-01
Unemployment	n/a
10Y yield	3.23	3.24	-0.00 ▬	2010-07-09
2Y yield	2.24	2.24	-0.00 ▬	2010-07-09
2s10s slope	0.99	1.00	-0.00 ▬	2010-07-09
FX vs USD	n/a

Euro area

Indicator	Current	Prior	Δ	As of
CPI (YoY)	1.40	1.60	-0.20 ▼	2010-06-30
Policy rate	1.00	1.00	+0.00 ▬	2010-07-08
GDP	0.00	0.10	-0.10 ▬	2010-07-01
PMI (mfg)	55.60	55.60	+0.00 ▬	2010-07-01
PMI (svc)	55.50	55.40	+0.10 ▬	2010-07-05
Unemployment	10.00	10.10	-0.10 ▬	2010-07-02
10Y yield	3.61	3.69	-0.08 ▼	2010-07-01 ⚠
FX vs USD	n/a

Japan

Indicator	Current	Prior	Δ	As of
CPI (YoY)	-0.90	-1.20	+0.30 ▲	2010-06-25
Core CPI	-1.60	-1.60	+0.00 ▬	2010-06-25
Policy rate	0.10	0.10	+0.00 ▬	2010-06-15
GDP	n/a
PMI (mfg)	n/a
Unemployment	5.10	5.10	+0.00 ▬	2010-06-29
10Y yield	1.07	1.08	-0.01 ▬	2010-07-01 ⚠
FX vs USD	n/a

Concept libraryL3

Terms marked ✓ are linked inline above — click any dotted term in the text to expand it in place.

2s10s: The gap between the 10-year and 2-year government bond yields. Positive = normal upward-sloping curve; negative ('inverted') = a classic late-cycle/recession warning.
PMI: Purchasing Managers' Index. Above 50 = the sector is expanding vs last month; below 50 = contracting. A timely read on activity.
carry trade: Borrowing in a low-rate currency (long the yen's case) to buy higher-yielding assets elsewhere. It unwinds violently when the funding rate rises or the funding currency strengthens.
credit impulse: The change in the flow of new credit into an economy. A rising impulse front-runs stronger demand for commodities and cyclical goods, with a lag.
cyclicals: Sectors whose earnings rise and fall with the economic cycle — industrials, materials, energy, consumer discretionary.
defensives: Sectors whose demand is steady through the cycle — consumer staples, utilities, healthcare. They outperform when growth slows.
discount rate: The rate used to convert a future cash flow into today's value. A higher discount rate makes far-off cash flows worth less now.
disinflation: Inflation that is still positive but falling (prices rising more slowly) — distinct from deflation, where prices actually fall.
duration: How sensitive an asset's price is to interest rates. 'Long-duration' assets (long bonds, fast-growing stocks whose profits are years away) move most when rates change.
net interest margin: The spread a bank earns between what it charges on loans and pays on deposits. Higher short rates / steeper curves tend to widen it.
nominal yield: The headline interest rate on a bond, before subtracting inflation.
policy rate: The interest rate a central bank sets directly (e.g. the Fed funds rate, the ECB deposit rate, China's LPR). It anchors all other rates.
rate path: The market's expectation of where the policy rate goes over the next year or two — not just today's level, but the whole expected trajectory.
real yield: The yield after subtracting expected inflation — what a lender actually earns in purchasing power. Real yield ≈ nominal yield − expected inflation.
term premium: The extra yield investors demand to hold a long bond instead of rolling short ones — compensation for tying money up and for issuance/inflation risk.