DM Data Week Ahead: Aug 17-21

Data and events for the week ahead

USA

Monday sees August’s Empire State manufacturing survey, and August’s NAHB homebuilders survey. More signals on the housing sector will come on Tuesday. We expect July housing starts to fall by 4.7% to 1360k while permits fall by 0.3% to 1370k. July pending home sales are also due. Tuesday also sees July industrial production, where we expect a 0.4% increase overall with manufacturing rising by 0.2%, and July import and export prices.

FOMC minutes from July 29 will be closely watched with Chairman Warsh having not given a clear explanation of the decision to leave rates unchanged. We expect the minutes will show a significant minority in favor of tightening due to inflation risk, and several more seeing the possibility of tightening if upcoming inflation data disappoints. Only a minority will be sufficiently confident that inflation is headed for target to be confident of sustaining steady policy for some time.

Thursday’s initial claims data will cover the survey week for August’s non-farm payroll. July’s Philly Fed manufacturing survey is also due.

Friday sees August manufacturing and service PMIs.

CANADA

Canada’s data highlight will be July CPI on Monday. We expect a modest rise in yr/yr growth to 2.9% from 2.8% on energy but the Bank of Canada’s core rates to remain stable.  Tuesday sees July housing starts and Thursday July’s IPPI and RMPI. June retail sales are due on Friday. A preliminary estimate for a 0.4% increase was given with May’s report. Trade talks are the key focal point.

Eurozone

The August 21 preliminary estimate for the August S&P PMI will be the highlight of the week, with a marginal increase expected versus July.  August 20 sees the flash estimate of the Q2 Labor cost growth where a 3.0% Yr/Yr figure is expected and the ECB watches this figure for an input into PPI and CPI price setting behaviour.  Final July CPI is released on August 19. 

UK

August 19 sees the July CPI inflation figure, with a pick-up in the Yr/Yr to 3.0% expected. Higher oil prices with renewed Iran/U.S. hostilities is the cause, though energy prices have drifted off the July highs.  August 18 sees the labor market update, with the highlight being the Jun average earnings excluding bonuses that should show a small decline from the 3.4% in May.  July HMRC payroll change will also be of interest. 

JP

Kick starting the week with Q2 GDP, widely expected to be another quarter of growth, may surprise to the low side given soft domestic demand. Private consumption may miss estimates and potentially drive growth lower. Government spending will counter that lag partially. We also have trade balance on Thursday and National CPI on Friday. With stimulus going on till September, the July number will likely be below 2%.

AU

Wage price index for Q2 will be more important than other labor data on Thursday and PMIs on Friday. The RBA has kept rates unchanged in the past meeting, citing accumulative effect of tightening. If the wage growth turned higher, albeit unlikely, could see market anticipation of rate hike changing.

NZ

Business PSI on Monday, PPI on Wednesday. The more important trade balance will be released on Friday.