Last week was a very busy week. The British pound staged a recovery on the back of the news of formation of the new government in London and the decision of the Bank of England (BoE) not to cut the interest rate, but the gains got eroded by the end of the week. Yen went on the back foot during the period July 11 to July 15 on talks about helicopter money, a form of fiscal stimulus. In the U.S., retail sales exceeded the prediction in June as Americans spent more on motor vehicles and a lot of other goods. This suggested a rebound in growth in the second quarter. However, the future is likely to be somewhat less promising as the consumer confidence was lower compared to last month.
The week starting July 18 will see release of economic data such as UK employment and inflation data, rate decision by European Central Bank (ECB) and US housing data, among others. Here are some of the main economic data scheduled for release during the week July 18 to July 22.
#1: New Zealand Consumers Price Index (Sunday 07/17/2016 22:45 GMT)
In the quarter ended March 2016, the consumers price index (CPI) edged up 0.2 percent from the previous quarter to 1200 as petrol prices declined 7.7 percent. On a seasonally adjusted basis also the CPI increased 0.2 percent. For the quarter ended June 2016, the CPI is expected to increase by 0.5 percent on quarter-on-quarter basis.
Updated : Actual of New Zealand CPI q/q : 0.4%
#2: Australia Monetary Policy Meeting Minutes (Monday 07/18/2016 1:30 GMT)
The Board of the Reserve Bank of Australia is all set to release the Minutes of the Monetary Policy Meeting held earlier n the month.
#3: UK Inflation Data (Tuesday 07/19/2016 8:30 GMT)
In May, the inflation rate remained flat in the UK at 0.3 percent as a decline in clothing prices offset an increase in transport costs. Further, the inflation rate target of 2 percent set by the BoE has not yet been achieved. A forecast released by the central bank said that inflation would stay below 1 percent till the end of 2016 and below 2 percent till 2018. Inflation has remained low over the last two years because of weak energy prices. Further, the price war between major supermarkets have kept the food prices low. Analysts’ expectation is that policymakers will provide economic stimulus to improve inflation. It is, therefore, expected that UK inflation will rise to 0.4 percent this time.
#4: Germany’s ZEW Economic Sentiment (Tuesday 07/19/2016 9:00 GMT)
In June 2016, ZEW economic sentiment or economic sentiment towards Germany zoomed to 19.2 from 6.4 in the previous month, against analysts’ expectation of a fall to 5.1. However, the index was still below 24.4, the long-term average. This indicated that the confidence in German economy, irrespective of global headwinds, was good. Current conditions index rose to 54.5 in June from 53.1 in the previous month. The general economic conditions continue to remain challenging, mainly because of the uncertainty caused by the EU referendum. In the latest report, the ZEW economic sentiment index is expected to drop to 8.2.
#5: US Building Permits (Tuesday 07/19/2016 12:30 GMT)
In May, the number of building permits issued in the US rose by 0.7 percent to 1.14 million. On the other hand, US housing starts fell following a decline in the construction of multi-family housing units. However, the increase in the building permits in the recent times points towards a rebound in the next quarter. In June, it is anticipated that US building permits would rise to 1.15 million.
#6: UK Claimant Count (Wednesday 07/20/2016 8:30 GMT)
In the UK, the number of people who are unemployed reduced by 400 in May to 746,100 after it increased by 6,400 in April. Employment in the public sector increased by 6,000 in May though governmental positions fell to 2.2 million, a record low. On the other hand, private employment jumped by 500,000 on year-over-year basis to 26 million. Though the figures reflect optimism, economists foresee risks because of Brexit and economic slowdown. The unemployment rate in the UK has fallen to the lowest level of 5 percent since October 2005. It is expected that the number of unemployed would rise by 4,100 in June.
#7: US Crude Oil Inventories (Wednesday 07/20/2016 14:30 GMT)
Last week, crude oil stock declined by 2.5 million barrels higher than economists’ expectation of 2.3 million barrels. However, distillate and gasoline stocks increased the most since January 2016 in spite of the busy driving season. This is expected to drive the crude oil rice down in the near future.
#8: Eurozone Rate Decision (Thursday 07/21/2016 11:45 GMT)
The key interest rates (deposit rate -0.4 percent and headline rate 0.00 percent) have been maintained at the same level by the European Central Bank (ECB) for the last two months in line with analysts’ forecast. Further, the ECB has upgraded the growth and inflation forecasts for 2016 to 1.6 percent from 1.4 percent, but has warned that Brexit poses growth risks. President Mario Draghi expects economic growth to continue at a steady pace but at a moderate rate.
#9: US Philly Fed Manufacturing Index (Thursday 07/21/2016 12:30 GMT)
In June, the Philadelphia Fed manufacturing index rose, recording a positive reading for the second time in as many as ten months. The manufacturing index rose to 4.7 from -1.8 in the month before. The index exceeded the market forecast of a gain of 1.1 points. However, new orders declined to -3.0 from May’s -1.9. Further, the employment index dropped by 10.9 in June, worse than the previous months’ decline of 3.3. In July, Philly manufacturing index is expected to rise to 5.1.
#10: US Unemployment Claims (Thursday 07/21/2016 12:30 GMT)
The number of people in America who filed initial claims for benefits related to unemployment continued to remain steady at 254,000 though analysts expected that the unemployment claims will to rise to as much as 263,000. When the jobless claims data is released this week on Thursday, it is expected that it will continue to stay below 300,000 mark for the 71st consecutive week, the longest streak since 1973.
On the other hand, the four-week moving average dropped by 5,750 claims to 259,000 from that for the previous week and the number of continuing claims rose by 32,000 to as much as 2.149 million from that for the week before. A broader outlook suggests that the US employment market is continuing to improve as the monthly jobs report published last week showed a gain of 287,000 jobs and an increase in wages. On Thursday’s report, it is expected that the number of claims for unemployment benefits is expected to increase to 271,000.