DM Data Week Ahead: July 27-30

For the Week Ahead

USA

The highlight of the US calendar is the FOMC meeting on Wednesday. After the subdued June CPI we expect policy to be left unchanged but there will be some debate on tightening, with possibly a couple of dissenting votes. The statement is unlikely to give much away and the dots will not be updated at this meeting. Warsh will avoid forward guidance but his tone may lean hawkish.

There is also plenty of data. On Monday we expect a 3.7% increase in June durable goods orders and a 0.9% increase ex transport. On Tuesday we expect the advance June trade deficit to correct to $100.8bn from May’s sharply higher $105.9bn. Advance June wholesale and retail inventories are also due. Tuesday also sees May house price data from FHFA and S and P Case-Shiller and July consumer confidence.

Durables, trade and inventories data may lead to some fine tuning for estimates for Thursday Q2 GDP release, which we currently expect to rise by 1.4% annualized, restrained by weakness in inventories and net exports. We expect core PCE prices to rise by 3.2%. This assumes a 0.1% rise in June’s core PCE price index which will be released at the same time. We expect gains of 0.3% in both personal income and personal spending for June. Weekly initial claims are also due. On Friday we expect a 0.7% rise in Q2’s Employment Cost Index. The final Michigan CSI is also due, and may be weaker than a stronger preliminary release given renewed Middle East concerns.

CANADA

Canada releases May CPI on Friday. We expect a 0.1% rise in line with a preliminary estimate made with a strong April report. The preliminary estimate for June will probably look similar to May, keeping Q2 on target for a 2.5% annualized forecast from the Bank of Canada.

EZ

The key figure will be the flash Q2 GDP estimate on July 30, though recent volatility in quarterly numbers means that markets will want to do a deeper analysis dive rather than reacting to the headline – a small rise is forecast after a 0.2% fall in Q1. July 31 also see the July flash CPI figure for the EZ, where the headline is projected to rise to 3.0% Yr/Yr – given the renewed oil prices increase with Iran/U.S. hostilities.  Thursday also see the July economic sentiment indicator, while July 27 sees the June money supply figures. 

UK

The key event is the July 30 MPC meeting.  Though no change in policy rates is expected, the market is looking for clues on a September hike – with a heavy bias of a 25bps hike in the money market.  The press conference and monetary policy report will likely be hawkish, but is unlikely to pre signal a September move.  Elsewhere, June money supply figures are released on July 29. 

JP

Tokyo CPI on Friday will continue to demonstrate how the headline figure being suppressed by stimulus while core-core inflation reflects the latest rebound in private consumption. Retail trade and unemployment rate is on the same day but will carry much less weight. The critical on paper BoJ meeting will likely be a non-event as BoJ assess the second round energy push inflation in the coming months. Copy and paste forward guidance is expected.

AU

All important CPI figure will be released on Wednesday. Q2 CPI should remain above target range and could see another jump towards mid 4% while monthly CPI could moderate for now. The trimmed mean CPI should gain more traction as RBA will be closely monitoring that figure. Governor Bullock will also be speaking on Tuesday and could preview what is to come.