BUZZ-Week Ahead-China PMIs and Fed’s favoured inflation gauge in focus

June 26 (Reuters) - The health of China’s economy and the trend of core inflation in the U.S. have been key drivers of markets recently – both will be in the spotlight this week with the China PMI and U.S. PCE price index releases.

China will publish its official manufacturing and non-manufacturing PMI for June on Friday. May’s manufacturing PMI came in at a disappointing 48.8. Another weak number will heighten expectations of more decisive action to support the economy. China will also be releasing industrial profits for May on Wednesday.

In a busy week for U.S. data, the main event will be monthly core-PCE price index. Federal Reserve Chair Powell and other Fed members have referenced that inflation gauge when forecasting the Fed’s rate path ahead. The market is expecting +4.7% annually in May - unchanged from April. Other key U.S. data include durable goods, final Q1 GDP, Chicago PMI, University of Michigan consumer sentiment and a clutch of housing data that includes Case-Shiller house prices, new home sales and pending home sales.

Key European data comprise German IFO and CPI and HICP inflation data for the ECB and Germany. UK data includes final Q1 GDP and Q1 current account.

Japan will release Tokyo CPI for June along with employment data, retail sales and IP. Australia data includes CPI and retail sales for May. Both have the capacity to impact expectations for the data-dependent Reserve Bank of Australia. For more click on (FXBUZ)

(John Noonan is a Reuters market analyst. The views expressed are his own. Editing by Ewen Chew)