Despite a strong rebound on Friday, US stockmarkets closed lower for the week, after red-hot US inflation raised speculation the Fed might raise rates by a historic 100 basis points when it meets next week.

The ASX200 gave back a good chunk of the previous week’s gains, as the heavyweight materials sector recorded its sixth straight week of falls on tumbling commodity prices and fears of recession.

Here are the top five things to watch in markets this week:

1. ECB interest rate meeting

The ECB meets this week and faces the dilemma of taming inflation without pushing the European economy into recession.

This will likely see the ECB lift rates by 25 basis points, taking its key interest rate to -0.25 per cent and signal a larger move is likely in September.

2. Will Russian gas supply to Europe resume?

Natural gas prices in Europe surged again after Russia shut down the Nord Stream 1 pipeline for maintenance.

There are fears that Russia will not resume gas supply to Europe after maintenance is scheduled to conclude later this week.

3. RBA meeting minutes and Dr Lowe’s speech

At its meeting on July 5, the RBA raised the cash rate by 50 basis points to 1.35 per cent.

The accompanying statement noted the resilience of the Australian economy and a commitment to do “what is necessary to ensure that inflation in Australia returns to target over time”.

The meeting minutes and a speech by RBA governor Philip Lowe on Wednesday are likely to reiterate the overarching message – more rate hikes are coming.

4. UK inflation data

The market is looking for inflation to rise from 9.1 per cent to 9.2 per cent year on year, which should be enough to ensure the Bank of England raises rates by 50 basis points when it meets in early August.

5. Q2 US earnings season

A huge week for Q2 earnings reports with companies including Tesla, Twitter and Netflix set to report.

Netflix has been the worst performer in the S&P500 this year, and investors are braced for Netflix to report the loss of more subscribers this quarter.

The release of Twitter’s results will come as a welcome distraction from its dispute with Elon Musk, now heading to the courts.

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