It’s a big week ahead for financial markets with a series of critical economic data on the schedule beginning early Tuesday. Starting with the United Kingdom’s monthly CPI number, inflation is expected to be unchanged from the last report at 0%, however, on an annual basis consensus is 2.7%, just 10 basis points above the June reading of 2.6%. Scheduled Wednesday is data for the British labor markets, expecting to see a fall in Claimant Counts to 3,700, down from the previous 5,900, as well as the Unemployment Rate holding steady at 4.5%. This would bode well for those in the BoE in the rate hike camp as wages and job growth were specifically cited for reasons to hold rates steady at the last monetary policy meeting. Later in the week we also get Retail numbers, expected to show a decline for July with only a 0.2% increase MoM and 1.3% YoY increase. The consensus of conflicting data lends no clarity to how the BoE may interpret the British economy’s growth prospects, should forecasts be accurate.
Core Retail Sales starts the U.S. off Tuesday morning looking for a 0.3% MoM increase for the month of July. However, that number would seem a bit unlikely given the weak July data we received last week from CPI and Initial Jobless Claims signaling slower demand. Housing Starts, Crude Inventories and Jobless Claims will serve to further the accuracy of whether or not the U.S. is continuing its move back to strength in the middle months of the year and whether or not we’ll see the 3rd rate hike for 2017.
The Eurozone has only two pieces of information coming out this week albeit crucial pieces of data. GDP and Inflation are scheduled Wednesday and Thursday, respectively. GDP for Q2 is forecast to repeat the previous quarter at 0.6% QoQ and 2.1% YoY, while Core Inflation on a yearly basis is forecast to shrink 10bp to 1.2%. But arguably the most important indicator of the Eurozone economies will come in the form of a speech from the ECB President Mario Draghi later this month at the FOMC’s Jackson Hole gathering. Investors will look to glean any signals from the bank’s president as to the plans for trimming stimulus and possible rate hikes for the future – an indicator certain to shake markets up