Events to Look Out for Next Week

Andria Pichidi

July 24, 2020

The growing worries over the spreading coronavirus, the rollback in some reopenings, and possible flattening in growth have set the scene for risk aversion. Adding to the mix is the the increased friction between the US-China. Therefore next week’s inflation and GDP data out of some of the major economies and Fed monetary policy and press conference could be the highlights in the coming week. Another focus is the upcoming Q2 corporate earnings season, which will get into gear next week with “show and tells” from the FANGs and tech sector in general.

Have a look at the most important events of the coming days in our usual weekly publication.

Monday – 27 July 2020

German IFO (EUR, GMT 08:00) – German IFO business confidence is expected to slip to 85 after the jump seen in June. The current conditions index nudged higher, but less than hoped and the overall improvement is mainly due to a jump in the future expectations reading.
Durable Goods (USD, GMT 12:30) – Durable goods orders are expected to rise 14.0% in June with a 55.7% surge in transportation orders, after a 15.7% headline orders rebound in May that included an 82.0% transportation orders surge. Durable shipments should rise 10.5%, and inventories should rise 0.5%.

Tuesday – 28 July 2020

Consumer confidence (USD, GMT 14:00) – Consumer confidence is expected to bounce to 128.0 in July from 121.5 in June, versus another 16-month low of 121.7 as recently as January and an 18-year high of 137.9 in October. Overall, confidence measures remain historically high.

Wednesday – 29 July 2020

Consumer Price Index (AUD, GMT 01:30) – Australian Q2 CPI is expected to rise to 0.2% after confirmed at 0.3% q/q for Q1 2020.
Interest rate Decision and Conference (USD, GMT 18:00) – The FED is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. Hence dovish guidance is expected from the Fed at next week’s FOMC, with some speculating that the US central bank is considering yield curve targeting. A Reuters survey highlighted increasing pessimism about the nearer-term US outlook given the extent of localized lockdown measures in response to the spike in coronavirus cases across many southern and western states.

Thursday – 30 July 2020

Gross Domestic Product (EUR, GMT 06:00) – Q1 2020 GDP was confirmed at -2.2% q/q as investment, consumption plunged. Q2 will look even worse as several economic sectors remain impacted by lockdown and new measures. More importantly, the disruptions of supply chains during the height of lockdowns have led many to re-focus on domestic production and Germany’s export oriented production sector that also relies heavily on real time supply chains, may have to rethink its strategy long term.
Harmonized Index of Consumer Prices (EUR, GMT 12:00) – The German HICP inflation is expected to slip back to 0.6% y/y for July after it was revised up to 0.8% y/y in June.
Gross Domestic Product (USD, GMT 12:30) – Gross Domestic Product is expected to show a contraction rate of -32.0%, with weakness across all the GDP components thanks to mandatory closures between mid-March and early-May. The Q2 hits to the economy were particularly large for net exports, and exports in particular, alongside hefty pull-backs in service consumption.
Jobless Claims (USD, GMT 12:30)– US Initial jobless claims rose 109k to 1,416k in the week ended July 18, missing estimates for a 16th straight decline. This uptick follows the -3k slide to 1,307k (was 1,300k) in the July 11 week and the -98k drop to 1,310k over the July 4 week.

Friday – 31 July 2020

Manufacturing PMI (CNY, GMT 01:00) – Final non- and NBS-Manufacturing PMIs are expected to decline in July, to 51.2 from 54.4 and 48.6 from 50.9 respectively.
Retail Sales (EUR, GMT 06:00) – 11% June retail sales gains are expected for Germany, following 13.9% May gains. April revised to -6.5% m/m.
Consumer Price Index & Gross Domestic Product (EUR, GMT 09:00) –The Eurozone Inflation was confirmed at 0.3% y/y in the final June reading, in line with the preliminary number and up from 0.1% y/y in the previous month. Core inflation fell back to 0.8% y/y as food price inflation decelerated, although at 3.2% y/y it remains high, largely thanks to the knock on effects of lockdown measures. The preliminary CPI for July is expected to come at 0.4% y/y, with the core inflation at 0.9% y/y. Preliminary Gross Domestic Product is expected to slow further to -4.7% in Q2, after Q1 GDP revised up to -3.6% q/q from -3.8% q/q reported initially.

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Andria Pichidi

Market Analyst

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