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

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.

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)	5.40	5.15	+0.25 ▲	2021-08-11
Core CPI	0.30	0.13	+0.17 ▲	2021-08-11
Core PCE	3.96	3.50	+0.46 ▲	2021-08-01
Policy rate	0.25	0.25	+0.00 ▬	2021-08-15
GDP	6.50	3.30	+3.20 ▲	2021-07-29
PMI (mfg)	59.50	60.60	-1.10 ▼	2021-08-02
PMI (svc)	64.10	60.10	+4.00 ▲	2021-08-04
Unemployment	5.40	5.10	+0.30 ▲	2021-08-06
10Y yield	1.29	1.36	-0.07 ▼	2021-08-13
2Y yield	0.23	0.23	+0.00 ▬	2021-08-13
2s10s slope	1.06	1.13	-0.07 ▼	2021-08-13
FX vs USD	92.52	93.04	-0.52 ▼	2021-08-13

China

Indicator	Current	Prior	Δ	As of
CPI (YoY)	1.00	1.10	-0.10 ▼	2021-08-09
Policy rate	3.85	3.85	+0.00 ▬	2021-07-20
GDP	7.90	18.30	-10.40 ▼	2021-07-15
PMI (mfg)	50.10	50.40	-0.30 ▬	2021-08-01
PMI (svc)	53.30	53.50	-0.20 ▬	2021-07-31
Unemployment	5.10	5.10	+0.00 ▬	2021-08-01
10Y yield	2.88	2.86	+0.02 ▬	2021-08-13
2Y yield	2.53	2.52	+0.01 ▬	2021-08-13
2s10s slope	0.35	0.34	+0.01 ▬	2021-08-13
FX vs USD	6.48	6.48	+0.00 ▬	2021-08-13

Euro area

Indicator	Current	Prior	Δ	As of
CPI (YoY)	2.20	1.90	+0.30 ▲	2021-07-30
Policy rate	0.00	0.00	+0.00 ▬	2021-07-22
GDP	-0.10	0.30	-0.40 ▼	2021-07-30
PMI (mfg)	62.80	62.60	+0.20 ▬	2021-08-02
PMI (svc)	59.80	60.40	-0.60 ▼	2021-08-04
Unemployment	7.70	7.90	-0.20 ▼	2021-07-30
10Y yield	0.06	0.16	-0.10 ▼	2021-08-01 ⚠
FX vs USD	1.17	1.17	-0.00 ▬	2021-08-13

Japan

Indicator	Current	Prior	Δ	As of
CPI (YoY)	-0.50	-0.80	+0.30 ▲	2021-07-20
Core CPI	-1.10	-1.10	+0.00 ▬	2021-07-20
Policy rate	-0.10	-0.10	+0.00 ▬	2021-07-16
GDP	n/a
PMI (mfg)	n/a
Unemployment	2.90	3.00	-0.10 ▼	2021-07-30
10Y yield	0.02	0.01	+0.01 ▬	2021-08-01 ⚠
FX vs USD	110.40	110.37	+0.03 ▬	2021-08-13

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.