This Week Aug 15-19 2022
Retail sales, housing data, and the most recent FOMC meeting minutes will take center stage in the US. Investors elsewhere will focus on data on inflation rates for the UK, Japan, and Canada. Other significant data points include the Zew Economic Sentiment Index for Germany, China’s industrial production, Australia’s and the UK’s jobless rates, and Japan’s Q2 GDP growth.
Investors looking for any indications as to whether the most recent 75bps point hike was the last of its kind will focus their attention on the Fed FOMC meeting minutes from the July meeting in the US. Further, while the rise in consumer prices is gradually affecting purchasing power, retail sales data are expected to stay sluggish. It would be interesting to track housing data as well, with permits for construction, housing starts, and sales of existing homes taking center stage. Industrial production, the New York Empire State, and Philadelphia Fed Manufacturing Indices are other significant releases.
The Canada CPI, which is scheduled on Tuesday and is a first-tier announcement, will be widely followed elsewhere in America since it could provide hints regarding the Bank of Canada’s rate path.
The United Kingdom’s economic calendar is jam-packed with important releases, including data on retail sales, GfK consumer confidence, unemployment rates, inflation rates, and public sector net borrowing. Retail sales are probably down for the third straight month according to data from the ONS, which will likely indicate that the UK’s inflation rate increased to a new four-decade high of 9.8% in July. The unemployment rate is projected to remain constant at 3.8% in the second quarter.
Additionally, the Euro Zone will receive the final reading of July’s inflation rate as well as a second estimate of second-quarter GDP. At the same time, investor sentiment in Germany is anticipated to marginally increase after reaching a more than 10-year low in July. Other significant economic data include the construction output, current account, and trade balance for the Eurozone; producer and wholesale prices for Germany; foreign trade for Spain; second-quarter GDP figures for Poland and the Netherlands; and industrial production and trade balance for Switzerland. The Norges Bank is anticipated to increase its benchmark interest rate by an additional 50 basis points when it meets on Thursday, as inflation increased more than anticipated to a 34-year high of 6.8% in July. The Central Bank of Turkey, on the other hand, is anticipated to maintain its benchmark interest rate at 14 percent for an additional month.
In Australia, the RBA will issue the minutes from its August meeting, providing details on why the central bank raised interest rates by 50 basis points, and the unemployment rate data for July will also be made public. The RBNZ is anticipated to increase its official cash rate by 50 basis points in the meantime.
Preliminary Q2 GDP data from Japan, which will start off a busy week of macroeconomic announcements in Asia, is expected to indicate a 0.6% quarterly recovery following the modest contraction in Q1. Since inflation has risen above the BoJ’s target of 2% during the previous three months, investors are also eagerly awaiting the country’s July consumer pricing data. Following the release of retail sales, the jobless rate, and foreign direct investment data in China, industrial production for July will provide additional details on how the economy has recovered from stringent Covid lockdowns in the second quarter. Thailand’s GDP is anticipated to grow in Q2 compared to the rest of Asia. Additionally, the Bangko Sentral ng Pilipinas is anticipated to maintain its hawkish posture and increase its important overnight borrowing rate by 50 basis points, which would be its biggest rate increase since 2018.