This Week August 8-12 2022

This Week August 8-12 2022

Investors will be closely awaiting the inflation report after a good US jobs report on Friday. The case for Fed rate hikes may be strengthened by indications that inflation is still high despite declining commodity prices. In other countries, CPIs will also be released in China, Mexico, Brazil, and India. The United Kingdom’s Q2 GDP reading would also be intriguing.

This week, focus will be on the US inflation data, which is anticipated to indicate that prices increased more slowly than previously thought due to a decrease in the price of gasoline. The annual rate of inflation is expected to fall to 8.7 percent from 9.1 percent as the headline inflation is predicted to increase by 0.2 percent month over month. This would be the smallest monthly gain since January 2021. However, core inflation probably increased by 0.5% from the previous month, raising the annual rate to 6.1% from 5.9%. The producer price index and the University of Michigan sentiment index are two additional top-tier US calendar releases. It will be interesting to monitor inflation data from Brazil and Mexico as well as the central bank of Mexico’s monetary policy.

In addition to business investment, trade balance, manufacturing and construction production, the United Kingdom will also release its preliminary estimate of second-quarter GDP growth. After growing by 0.8 percent in the preceding quarter, the British economy probably shrank by 0.2 percent in April–June as a result of rising energy costs and tax increases that reduced consumption.

Final estimates for July’s consumer prices are anticipated to show that while inflation slowed down slightly in Germany and Italy, it accelerated in France and Spain. At the same time, after two months of gains, industry activity in the Euro Area most likely came to a halt in July. The unemployment rate in Switzerland, the second-quarter GDP figures for Russia, and the industrial output and unemployment rates for Turkey will also be released.

Asia’s trade data for July will be released by China, where exports are expected to continue to rise strongly as investors assess the effects of the economy’s gradual opening following the Covid lockdowns. After June’s figure reached a two-year high, investors will also closely monitor incoming inflation statistics. More than two months after the start of the RBI’s tightening cycle, the Ministry of Statistics in India will provide new inflation data for July. In Australia, notable releases for August include Westpac Consumer Confidence and NAB Business Confidence. The Bank of Thailand will increase interest rates by 25 basis points to begin its cycle of tightening elsewhere. The unemployment rates for South Korea, Malaysia, and the Philippines will be revealed in the interim.