Welcome to our weekly agenda, our briefing of all the key financial events globally.
What a week! It was a gigantic week with the Dollar index the weakest since spring 2022, as markets scaled back tightening expectations. It looks like bearish momentum will continue to pressure as the softening in inflation and the less hawkish Fed outlooks weigh. Risks of further action by the ECB are slipping too, but so far less so than for the FOMC, while the BoE is likely to boost rates by another 50 bps in August. But will the sentiment remain next week?
Monday – 17 July 2023
G20 Meetings – DAY 4 Gross Domestic Product & Industrial Production (CNY, GMT 02:00) – The quarterly GDP in China is likely to have risen on an annualized basis to 7.3% from 4.5% for the first Quarter of 2023. Industrial Production for June is expected at 2.7% y/y from 3.5% y/y.Speeches: ECB President Lagarde (EUR, GMT 08:15) Empire State Manufacturing Index (USD, GMT 12:30) – The Empire State index is expected to fall to -8.0 from 6.6 in June, versus a deep 2-year low of -32.9 in January and a 43.0 all-time high in July of 2021.
Tuesday – 18 July 2023
G20 Meetings – DAY 5 RBA Minutes (AUD, GMT 00:30) – The RBA minutes should provide guidance on the pace for keeping rates on hold and for changing its meeting schedule from next year but remains on course for additional tightening. RBA signalled that more rate hikes may be necessary in the future, while the focus for now seems to be on monitoring the impact of previous hikes. Consumer Price Index and Core (CAD, GMT 12:30) – CPI is expected to hover around 3% for the next 12 months and should fall to target by mid 2025. Previously the Bank projected a late 2024 timeframe for hitting the goal. Housing price gains are likely to persist. Officials “remain resolute” in their commitment to fighting inflation and will continue to assess the data. Retail Sales & Industrial production (USD, GMT 12:30 & 13:15) – June Retail Sales are expected to expand to 0.4% for the headline and 0.3% ex-autos, after respective May gains of 0.3% and 0.1%. Energy-led price declines have depressed nominal sales since Q2 of 2022, though we expect a 0.4% June rise for the CPI gasoline index that will bolster gasoline sales. Industrial production is projected to drop -0.1% in June after a -0.2% May decrease. We saw May declines of -0.4% for mining and -1.8% for utilities, alongside an 0.1% manufacturing uptick. In June we expect flat figures for manufacturing and mining, alongside an -1.0% decline for utility output due to mild weather.Consumer Price Index and Core (NZD, GMT 22:45) – New Zealand CPI for Q2 is expected at 0.9% q/q which will leave the headline falling at 5.9% y/y from 6.7% y/y.
Wednesday – 19 July 2 023
Consumer Price Index (GBP, GMT 06:00) – Concern about rising inflation and the sharp pick up in interest rates has put pressure on house prices, however, as Halifax highlights “how deep or persistent the downturn in house prices will be remains hard to predict”. Higher than expected wage growth has added to speculation that the BoE will be forced to deliver another 50 basis point rate hike at the next meeting. Market rates already spiked last week and the BoE is under pressure to prove that it takes inflation seriously and will act decisively. BoE’s Bailey acknowledged over the weekend that inflation problems are “more severe in the UK” but insisted that the central bank “will bring inflation back to target”. Bailey added that the BoE has “some flexibility about how quickly” this is achieved, but stressed that it is “absolutely critical that flexibility isn’t confused with people thinking we are not pursuing 2% anymore”.Consumer Price Index (EUR, GMT 09:00) – Eurozone headline inflation for June is seen at 5.5% y/y from 6.1% with core at 5.4% y/y from 5.3% y/y.Building Permits & Housing Starts (USD, GMT 12:30) – Housing starts are expected to drop -11.1% to a 1.450 mln pace in June from 1.631 mln in May, versus a 3-year low of 1.321 mln in January. Permits are expected to improve to 1.500 mln from 1.496 mln in May, versus a 3-year low of 1.337 mln in December. Pending home sales fell -2.7% in May after a -0.4% April decline.
Thursday – 20 July 2023
Labour Market Data (AUD, GMT 01:30) – Employment change for June is expected to grow by 17K from 75.9K, with the unemployment rate unchanged at 3.6% m/m.Philly Fed Index (USD, GMT 12:30) – The Philly Fed index is expected to rise to -10.0 from -13.7 in June, versus a 3-year low of -31.3 in April and a 48-year high of 50.2 in April of 2021.Existing Home Sales (USD, GMT 14:00) – The Existing Home Sales are anticipated to rise 0.5% in June to 4.320 mln from 4.300 mln in May and 4.290 mln in April. We saw a 14-year high of 6.65 mln in January of 2021. In Q2, we expect an average sales pace of 4.303 mln, after a 4.327 mln rate in Q1. The month’s supply of homes should edge up to 3.1 in June from 3.0, versus a deep all-time low of 1.6 in January of 2022.
Friday – 21 July 2023
Retail Sales (GBP, GMT 06:00) – UK Retail Sales rose 0.3% in May. Non-store retailing sales increased by 2.7%, benefiting from the warm weather in the second half of the month, which drove sales of outdoor-related goods and summer clothing for online retailers. On a yearly basis, retail trade contracted by 2.1%, a 14th consecutive month of decline and compared with forecasts of a 2.6% drop.Retail Sales (CAD, GMT 12:30) – Canadian Retail Sales are expected to be at -0.70% by the end of this quarter, according to Trading Economics global macro models and analyst expectations. In May they are expected to have risen by 0.5% m/m.
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Andria Pichidi
Market Analyst
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