BUZZ-Week Ahead-Tariff diplomacy, Powell testimony, US CPI lead

Feb 10 (Reuters) - Any attempts by the U.S. and China to avert an outright trade war, Federal Reserve Chair Jerome Powell's semi-annual Congressional testimony and U.S. inflation data will keep traders on their toes this week.

Beijing's counter-tariffs against the U.S. imposition of an additional 10% tariff on all Chinese imports are set to take effect on Monday, but investors will focus on hints of forthcoming talks between U.S. President Donald Trump and Chinese President Xi Jinping.

Powell's testimony on Wednesday will drive Fed expectations as traders await clues on how Trump's tariffs may impact monetary policy. The Fed's John Williams, Beth Hammack, and Raphael Bostic are also scheduled to speak during the week.

On the data front, all eyes will be on Wednesday's CPI and Thursday's PPI given a high degree of uncertainty around inflation prospects that may lead to slower interest rate cuts. Core CPI is forecast to nudge up to 0.3% from 0.2% in December. Retail sales, industrial production, consumer inflation expectations and weekly jobless claims are also due.

Europe has a quiet week for data, with industrial production, flash estimates of Q4 GDP and employment, and the final reading of German inflation. European Central Bank President Christine Lagarde is due to speak on Monday.

The UK publishes December and Q4 GDP, industrial and manufacturing production, and trade data. Bank of England Governor Andrew Bailey and Monetary Policy Committee members Catherine Mann and Megan Greene speak.

Japan has a low-key week with current account, trade and PPI data.

In China, January bank lending and credit data may be released.

Australian data is limited to housing finance and consumer and business confidence surveys. New Zealand has the RBNZ's Q1 inflation survey and food inflation.

The Bank of Canada publishes its market participants survey and January meeting summary, when it cut rates, slashed growth forecasts, and voiced concern about potential U.S. tariffs.

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