Economic Data and Events Week Ahead July 20-24
The highlight of the week comes from the ECB meeting and press conference, although we do not expect it to provide much guidance regarding September, sticking to the non-pre-commit language, to keep options open depending on data and geopolitical developments.
The UK has its busy week, but data is not seen moving the BoE away from its summer wait-and-see stance and focus is going to directed to the launch of Burnham’s premiership, and cabinet appointments.
Data and events for the week ahead
USA
It is a very quiet week for US data and Fed speakers will be quiet as the July 29 decision approaches. Thursday’s initial claims data will cover the survey week for July’s non-farm payroll. On Friday we expect improved S and P PMIs for July, manufacturing at 55.5 from 53.9 and services more modestly at 51.5 from 51.2. We also expect a correction higher in June new home sales, by 6.0% to 615k, but trend has slowed in the year to date.
CANADA
Canada releases June CPI on Monday, and we expect yr/yr growth to slow to 3.0% from 3.2% on energy, but with CPI-Median at 2.1% and CPI-Trim at 2.0% both unchanged from both April and May. Thursday sees May retail sales, for which the preliminary estimate was a rise of 1.0%. On Friday June’s IPPI and RMPI are due.
Eurozone
The key event is the July 23 ECB meeting and the statement and press conference, as the market seeks to understand whether the ECB could hike in September or later. Lagarde however will likely not provide specific guidance re September.
Elsewhere, July 24 sees the provisional PMI data for EZ and major countries. The EZ composite is expected to be down marginally to 50.0 from last month 50.2.
UK
The key event will be the announcement on a new Chancellor, with Andy Burnham set to take office on July 20. If Shabana Mahmood is confirmed as largely assumed by the press and market by the end of last week (85% now on betting), that’s seen as gilt market friendly, while Ed Miliband (<5% now) would raise concerns over fiscal slippage.
A heavy economic data schedule is led by the June CPI figure on July 22 where headline is expected to move up to 2.8% from 2.4%, but core inflation to fall 0.1% to 2.6% Yr/Yr. June retail sales on July 24 will also attract attention with the world cup expected to have boosted the monthly and yearly figures. Labour market data is also released on July 21. They key will be the average earnings ex-bonus, which is expected to remain unchanged at 3.4%.
JP
Key release for Japan next week is on Friday, where we have the June national CPI. Widely expected to be kept under 2% from stimulus, core-core could have exceeding expectation as rising real wage and recovery in household consumption squeezes. Else, there is also trade balance on Tuesday.
AU
Labor data on Thursday should continue to points toward a solid Australian job market. The historic participation rate is here to stay while unemployment and headline changes will likely chop seasonally. It would be great to see an upbeat full-time employment changes after a strong part time growth in May.
NZ
We have trade balance on early Monday and the more important Q2 CPI on Tuesday. Q2 CPI will likely be close to 4% in light of the energy shock. While being previewed by the RBNZ, the jump will likely lead to gains in the Kiwi as market participants confirm the hawkish tilt in RBNZ OCR path.