More data to watch!
Last week US inflation numbers surprised the market participants. Both consumer and producer inflation eased to decrease the concerns and lift the stock markets. In the week ahead, we will have more inflation from other developed economies, as well as other economic data to watch and see what we have to expect from central banks in their September meetings.
1- China on Monday
The week will start with massive economic data from China. House Prices, Fixed Asset Investment, Industrial Production, Retail Sales, Unemployment Rate, and the National Bureau of Statistics of China Press Conference will be the events that can tell us more about the current economic condition in China. Economic growth in China has slowed down to some extent, and if continues can slow down the global economic growth as well.
2- Canadian Inflation – Tuesday
Canadian inflation numbers on Tuesday will be very important as one of the developed countries, and also because of its close relations with the US economy. The recent measures that have been taken by the central bank, and decreasing energy prices are expected to slow down the July inflation to 7.6% annually, down from 8.1% in Jun. However, it would be still so high, and more likely, officials in BoC will continue their rate hike policies.
These data will put the Canadian Dollar in a bit weaker position.
3- Reserve Bank of New Zealand – Wednesday
RBNZ will hold its monetary policy and Interest Rate Decision meeting on Wednesday. It is so likely that Reserve Bank in New Zealand boosts the rates by another 50 bps as its third consecutive rate hike. These expected policies are supposed to lift the Kiwi against its rivals, while the market participants also anticipate another 50 bps rate hike in the next meeting.
4- EU ZEW Surveys – Tuesday
The August ZEW surveys are to be released this Wednesday. The ZEW surveys look to capture sentiment regarding the current state of the German and Eurozone economy as well as where consumers and manufacturers expect the economy to be in the next six months. While these data were in the negative territory in recent months, we are expecting to see some development, but still in the negative territory. Expected data is supposed to help the Euro against its crosses this week, but would not be enough to create a bullish wave.
5- British Inflation – Wednesday
The impact of the war in Ukraine continues to be widespread in European economies. Despite other major economies, we are expecting that inflation in July continues to grow, as energy prices continue to move higher because of fewer exports from Russia and supply shortages across the continent. The overall expectation is to see the CPI rise by 9.8% in July, up from 9.4%. We have producers, Raw materials, and House price inflations to watch as well. Expected data are supposed to put a bit of pressure on the London stock markets.
6- US data
Building Permits & Housing Starts on Tuesday, Retail Sales and FOMC meeting minutes on Wednesday, and Philly Fed Index on Thursday will be the most important data to watch in the US calendar, while some FOMC members will also give speeches, which will definitely be important. This week, market sentiment more than anything else will affect the prices, so we have to watch and see how investors will react to the published data. However, the overall expectation is to pause the uptrend and digest the data before any new trend formation.