Eurozone Inflation rose June and hit the European Central Bank’s target, raising expectations policymakers will leave the key interest rate unchanged later this month.

Chair Jerome Powell will speak as part of a panel of global central bankers at 9:30 a.m. ET in Portugal.

In upcoming economic data, the May job openings and labor turnover survey (JOLTS) will be released at 10 a.m. Also, the ISM PMI for manufacturing is due, along with construction data.

Inflation in the eurozone crept up in June, hitting the European Central Bank’s target and raising expectations that policymakers will leave the key interest rate unchanged later this month.

Consumer prices were 2.0% higher than the same month last year, up from the 1.9% of May, statistics agency Eurostat said Tuesday, matching expectations from economists polled by The Wall Street Journal.

The ECB cut its key interest rate last month for an eighth time since June last year. Investors anticipate policymakers to reduce rates again later in 2025, albeit stand pat in their July meeting. That contrasts with the Federal Reserve, which has been more wary of cutting interest rates given the potential impact of the Trump administration’s tariff policies.

Germany, Finland and Belgium last week all raised their estimated borrowing needs, early evidence of how higher defense spending in Europe is starting to affect national finances and sovereign-debt issuance.

At last week’s North Atlantic Treaty Organization summit, member nations agreed to increase defense spending to 5% of GDP by 2035 from 2%, implying significantly higher debt issuance in the years to come.

At the end of 2024, he had moved a quarter of production from China to Cambodia. Within a few months, that became 70%. The goal of a trip in June: transfer all of his products out of China.

9 a.m.: Johnson Redbook Retail Sales Index
9:45 a.m.: U.S. Manufacturing PMI
10 a.m.: ISM Report On Business Manufacturing PMI
10 a.m.: Construction Spending - Construction Put in Place
10 a.m.: Job Openings & Labor Turnover Survey
10 a.m.: RCM/TIPP Economic Optimism Index
11 a.m.: Global Manufacturing PMI
4 p.m.: Domestic Auto Industry Sales

7 a.m.: MBA Weekly Mortgage Applications Survey
7:30 a.m.: Challenger Job-Cut Report
8:15 a.m.: ADP National Employment Report
10 a.m.: Metropolitan Area Employment and Unemployment

Goldman Sachs is pulling forward its forecast for the Federal Reserve's next interest-rate cut to September from December, seeing lower inflationary risk from tariffs than before, its analysts say in a note. "The very early evidence suggests that the tariff effects look a bit smaller than we expected, [and] other disinflationary forces have been stronger," they say. "We suspect that the Fed leadership shares our view that tariffs will only have a one-time price level effect." While the labor market still looks healthy, it has become hard to find a job, and both residual seasonality and immigration policy changes pose near-term downside risk to payrolls, they say. Money markets also price in a rate cut in September, according to LSEG. — Emese Bartha

A pair of Fed officials have voiced support for a July rate cut, but most members of the central bank's policy committee don't seem on board with bringing rates lower yet. It could take a big miss in the June jobs data, out Thursday, to jolt the Fed into lowering rates next month, analysts at TD Securities write. Last month, the median Fed official penciled in a 4.5% unemployment rate at year end, versus a 4.2% unemployment rate in May. "If that threshold were to be met as early as June, it would certainly provide grounds for easing much sooner," TD writes. TD doesn't expect the jobs picture to weaken so dramatically, "but the risk is not low," the team adds. — Matt Grossman

The European Central Bank will likely keep rates steady in July to assess incoming data as it remains wary of high uncertainty, Oxford Economics' Riccardo Marcelli Fabiani says in a note. However, June's 2.0% inflation rate should reassure policymakers that disinflation in the eurozone is set to continue, he says. Despite a sudden rise owing to the escalation of tensions between Israel and Iran, oil prices have fallen back. The appreciation of the euro will also mean lower import costs, he says. "Most importantly, domestically-produced services inflation is set to continue declining thanks to wage growth easing." Additionally, a slowing economy is set to weigh on price pressures and lead to another interest-rate cut in the third quarter of this year, he says. — Ed Frankl

• The newest member of the Bank of Japan's policy board said the bank should carefully consider its next step in raising the policy rate amid high uncertainty over the trade outlook. "Considering recent economic conditions, we are no longer in a situation where we can rush" interest-rate hikes, Kazuyuki Masu said at his inaugural news conference on Tuesday. "I don't mean that we should go slowly, but we should proceed cautiously," Masu said. (Dow Jones Newswires) 
• Germany’s unemployment rate was unchanged in June, but signs of a loosening labor market remain as economic uncertainty around trade and geopolitics persists. The seasonally adjusted unemployment rate was 6.3% for a fourth consecutive month, data from Germany’s Federal Employment Agency published Tuesday said, matching a consensus of economists polled by The Wall Street Journal. (WSJ)
• South Korea’s exports rebounded in June largely on brisk semiconductor shipments, indicating resilience despite challenges from higher U.S. tariffs weighing on global trade. Exports from Asia’s fourth-largest economy rose 4.3% compared with the same period a year earlier to $59.80 billion, following a 1.3% fall in May, according to preliminary data released by the trade ministry on Tuesday. (WSJ) 
• Asia factory activity ended the second quarter on a weak note, as U.S. tariff uncertainty weighed on orders and production across much of the region. The downturn in manufacturing in the Asean bloc deepened at the midway point of 2025, as production shrank, while new orders, purchasing activity, and employment declined, S&P Global’s purchasing managers survey showed. (WSJ)
• Large Japanese manufacturers became slightly more optimistic about their business conditions in the second quarter despite tariff concerns, reviving rate-hike expectations. The main index measuring sentiment among big manufacturers rose to +13 in the Bank of Japan’s tankan survey released Tuesday, from the +12 reading in March. That was better than the +10 tipped by a poll of economists by data provider Quick and marked the first improvement in two quarters. (WSJ) 
• UBS Group said it is launching a share buyback of up to $2 billion, delivering on its plans to hand money back to shareholders after the Swiss government proposed tougher capital rules for the bank earlier this month. (WSJ)
• Apple said it will delay offering some planned new features to users in the European Union this year because regulations are making it harder to bring them to market in the region. (WSJ)
• A historic and tumultuous quarter is wrapping up with U.S. stocks at records and many investors betting the ride isn’t over yet. The April swoon that carried the S&P 500 to the brink of a bear market has been erased and then some. Now, investors have more reasons to feel upbeat. (WSJ)

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by news associate Roshan Fernandez in New York. Send your tips, suggestions and feedback to roshan.fernandez@wsj.com.