The Week Ahead: Highlights

Asia-Pacific Preview

Australia Inflation Report Key for RBA Rate Outlook

By Brian Jackson, Econoday Economist

Australian inflation data will be a major focus of the Asia-Pacific data calendar in the week ahead, with recent data showing that consumer inflation has been above the Reserve Bank of Australia's target range of two percent to three percent for ten consecutive months. The RBA left policy rates on hold at its last meeting in June, with officials expressing confidence that the three rate hikes already delivered so far this year will eventually help to bring inflation back into the target range.  A high inflation number next week, however, will likely boost the chances for further policy tightening at the RBAs next meeting mid-August. Quarterly producer price inflation data for the three months to June will also be published next week and will likely show an ongoing impact of the Iran conflict.

The Monetary Authority of Singapore will conduct its quarterly policy review in the week ahead after data last week showed core inflation picked up from 1.4 percent in May to 1.6 percent in June. Officials announced they would target a slightly higher rate of appreciation in Singapore's nominal effective exchange rate at their previous policy review in April. The increase in core inflation in June may prompt officials to consider a further adjustment to policy settings, though a sharp fall in exports in June will also be taken into account. Singapore will also publish industrial production data next week.

The official Chinese PMI survey will be published late in the week, providing an early indication of conditions in July. June data out next week include Indian industrial production, South Korea retail sales and industrial production, and Hong Kong trade. Hong Kong and Taiwan will also report GDP data for the three months to June.

US Preview

Up Next: FOMC Policy Announcement, Warsh Press Conference

By Theresa Sheehan, Econoday Economist

The economic data in the July 27 week will take a back seat to the results of the FOMC meeting at 14:00 ET on Wednesday and Chair Kevin Warshs press conference at 14:30 ET.

The most likely outcome of the meeting is for the fed funds target rate range to remain at 3.50 to 3.75 percent. The most current reports point to a labor market that remains roughly in balance with few risks to the maximum employment side of the dual mandate. On the other hand, while the inflation numbers looked better in June with less upward pressure on prices, policymakers will see a renewed threat to prices stability with the climb in oil prices, particularly in the rapid reaction for gasoline costs.

While Warsh will vigorously avoid giving forward guidance on the future direction of interest rates, he may well offer some framework guidance as to what data is influencing FOMC thinking at present. He may also offer some updates on his plans for the 5 working groups for reforms at the Federal Reserve, although it is too early to expect concrete initiatives. It is possible that Warsh will announce some of these at the upcoming Jackson Hole Forum sponsored by the Kansas City Fed on August 27-29. In any case, Warshs Q&A with reporters will probably echo his statements from his recent semiannual monetary policy testimony on July 14-15.

The Tuesday-Wednesday FOMC meeting will not include an update to the Summary of Economic Projections (SEP). That will next take place at the September 15-16 meeting. The FOMC will get the July Senior Loan Officers Opinion Survey on Bank Lending Practices. The April survey indicated that banks are generally tightening loan standards but also experiencing broadly lower demand for loans. The fundamentals will probably carry into the July report.

The advance estimate for second quarter GDP growth is set for 8:30 ET on Thursday. The FOMC will not have this information. Growth above 2 percent is widely expected. However, it is the composition of that growth that may be a concern. While personal consumption expenditures are going to rise, at least some of that will be from hikes in energy and foods costs and not contribute to actual expansion. Also, the investment in AI infrastructure has driven growth in gross investment and has made an extraordinary contribution to GDP gains in recent quarters.

The Week Ahead: Econoday Consensus Forecasts

Monday

Germany Ifo Survey for July (Mon 1000 CEST; Mon 0800 GMT; Mon 0400 EDT)

Consensus Forecast, Business Climate: 86.0

Consensus Range, Business Climate: 85.9 to 86.5

Consensus Forecast, Current Conditions: 84.4

Consensus Range, Current Conditions: 84.3 to 85.1

Consensus Forecast, Business Expectations: 87.5

Consensus Range, Business Expectations: 87.2 to 87.5

The consensus looks for the business climate index up slightly to 86.0 in July from 85.6 in June.

Eurozone M3 Money Supply for June (Mon 1000 CEST; Mon 0800 GMT; Mon 0400 EDT)

Consensus Forecast, Y/Y - 3-Month Moving Average: 3.2%

Consensus Range, Y/Y - 3-Month Moving Average: 3.0% to 3.3%

Forecasters see M3 growth at a 3.2 percent rate in June versus 3.0 percent in May.

US Durable Goods Orders for June (Mon 0830 EDT; Mon 1230 GMT)

Consensus Forecast, New Orders - M/M: 1.7%

Consensus Range, New Orders - M/M: -0.7% to 3.3%

Consensus Forecast, Ex-Transportation - M/M: 1.0%

Consensus Range, Ex-Transportation - M/M: -0.5% to 1.4%

Consensus Forecast, Core Capital Goods - M/M: 0.9%

Consensus Range, Core Capital Goods - M/M: 0.5% to 1.4%

Core capital goods orders expected to continue strong streak with 0.9 percent rise as AI buildout powers capex. Total orders expected up 1.7 percent, up 1.0 percent ex-transportation.

US Wholesale Inventories (Advance) for June (Mon 0830 EDT; Mon 1230 GMT)

Consensus Forecast, M/M: 0.3%

Consensus Range, M/M: 0.2% to 0.3%

Moderate 0.3 percent increase is the call for June wholesale inventories from a month earlier.

Tuesday

India Industrial Production for June (Tue 1600 IST; Tue 1030 GMT; Tue 0630 EDT)

Consensus Forecast, Y/Y: 5.7%

Consensus Range, Y/Y: 4.9% to 5.8%

The consensus forecast sees output rising at 5.7 percent rate in June, up from 5.1 percent in May.

US International Trade in Goods (Advance) for June (Tue 0830 EDT; Tue 1230 GMT)

Consensus Forecast, Balance: -$98.0 B

Consensus Range, Balance: -$107.5 B to -$93.0 B

The goods trade gap is expected narrower at $98.0 billion from a revised $106.5 billion in May.

US FHFA House Price Index for May (Tue 0900 EDT; Tue 1300 GMT)

Consensus Forecast, M/M: 0.0%

Consensus Range, M/M: 0.0% to 0.2%

House prices expected flat on the month for May.

US Consumer Confidence for July (Tue 1000 EDT; Tue 1400 GMT)

Consensus Forecast, Index: 92.3

Consensus Range, Index: 91.0 to 95.0

The consensus sees another small improvement to 92.3 in July from 91.2 in June and 90.6 in May.

Wednesday

Australia Monthly CPI for June (Wed 1130 AEST; Wed 0130 GMT; Tue 2130 EDT)

Consensus Forecast, CPI - Y/Y: 4.1%

Consensus Range, CPI - Y/Y: 4.1% to 4.2%

Australia inflation was hot at 4.0 percent on year in May and is seen hotter at 4.1 percent in June.

US FOMC Announcement (Wed 1400 EDT; Wed 1800 GMT)

Consensus Forecast, Change: 0 bp

Consensus Range, Change: 0 bp to 0 bp

Consensus Forecast, Federal Funds Rate - Target Range: 3.5-3.75%

Consensus Range, Federal Funds Rate - Target Range: 3.5-3.75% to 3.5-3.75%

Forecasters see the FOMC on hold at this meeting with rising odds of a 25 basis point rate increase on Sept. 16 and a second move in October, given inflation worries.

Thursday

France GDP Flash for Second Quarter (Thu 0730 CEST; Thu 0530 GMT; Thu 0130 EDT)

Consensus Forecast, Q/Q: 0.2%

Consensus Range, Q/Q: 0.2% to 0.3%

Growth expected at 0.2 percent in Q2 from Q1 after declining 0.1 percent in Q1.

Switzerland KOF Swiss Leading Indicator for July (Thu 0900 CEST; Thu 0700 GMT; Thu 0300 EDT)

Consensus Forecast, Index: 100.8

Consensus Range, Index: 100.7 to 102.5

The Swiss KOF index is seen at 100.8 in July, down from 101.2 in June.

Germany GDP Flash for Second Quarter (Thu 1000 CEST; Thu 0800 GMT; Thu 0400 EDT)

Consensus Forecast, Q/Q: 0.1%

Consensus Range, Q/Q: 0.0% to 0.1%

Consensus Forecast, Y/Y: 0.6%

Consensus Range, Y/Y: 0.4% to 0.7%

GDP expected at 0.1 percent on quarter and 0.6 percent on year in Q2, another sluggish showing after 0.3 percent and 0.4 percent in Q1.

Italy GDP for Second Quarter (Thu 1000 CEST; Thu 0800 GMT; Thu 0400 EDT)

Consensus Forecast, Q/Q: 0.0%

Consensus Range, Q/Q: 0.0% to 0.1%

Consensus Forecast, Y/Y: 0.6%

Consensus Range, Y/Y: 0.4% to 0.7%

GDP expected flat in Q2 from Q1 after rising 0.3 percent in Q1 from Q4.

Eurozone GDP Flash for Second Quarter (Thu 1100 CEST; Thu 0900 GMT; Thu 0500 EDT)

Consensus Forecast, Q/Q: 0.2%

Consensus Range, Q/Q: 0.1% to 0.3%

Consensus Forecast, Y/Y: 0.6%

Consensus Range, Y/Y: 0.4% to 0.7%

GDP growth expected better at 0.2 percent in Q2 from Q1 compared with minus 0.2 percent in Q1 from Q4.

Eurozone EC Consumer Sentiment for July (Thu 1100 CEST; Thu 0900 GMT; Thu 0500 EDT)

Consensus Forecast, Economic Sentiment: 96.0

Consensus Range, Economic Sentiment: 94.5 to 96.8

Consensus Forecast, Industry Sentiment: -7.0

Consensus Range, Industry Sentiment: -8.0 to -7.0

Consensus Forecast, Consumer Sentiment: -15.9

Consensus Range, Consumer Sentiment: -15.9 to -15.9

Economic sentiment expected at 96.0 in July.

Eurozone Unemployment Rate for June (Thu 1100 CEST; Thu 0900 GMT; Thu 0500 EDT)

Consensus Forecast, Rate: 6.2%

Consensus Range, Rate: 6.2% to 6.2%

Jobless rate expected flat at 6.2 percent.

UK BoE Announcement & Minutes (Thu 1200 BST; Thu 1100 GMT; Thu 0700 EDT)

Consensus Forecast, Change: 0 bp

Consensus Range, Change: 0 bp to 0 bp

Consensus Forecast, Level: 3.75%

Consensus Range, Level: 3.75% to 3.75%

The consensus looks for the BOE to keep rates steady again at the July meeting with the outlook uncertain, depending largely on inflation fallout from rising energy prices.

Germany CPI for July (Thu 1400 CEST; Thu 1200 GMT; Thu 0800 EDT)

Consensus Forecast, M/M: 0.7%

Consensus Range, M/M: 0.5% to 0.7%

Consensus Forecast, Y/Y: 2.7%

Consensus Range, Y/Y: 2.6% to 2.7%

Consensus Forecast, HICP - M/M: 0.8%

Consensus Range, HICP - M/M: 0.7% to 0.8%

Consensus Forecast, HICP - Y/Y: 2.8%

Consensus Range, HICP - Y/Y: 2.7% to 2.8%

CPI seen up 0.7 percent and up 2.7 percent on year in July versus minus 0.3 percent and 2.3 percent on year in June.

US GDP for Second Quarter (Thu 0830 EDT; Thu 1230 GMT)

Consensus Forecast, Quarter over Quarter - Annual Rate: 2.3%

Consensus Range, Quarter over Quarter - Annual Rate: 1.3% to 2.8%

Forecasters see Q2 GDP growth rate at 2.3 percent versus 2.1 percent in Q1.

US Jobless Claims for Week of July 25 (Thu 0830 EDT; Thu 1230 GMT)

Consensus Forecast, Initial Claims - Level: 204K

Consensus Range, Initial Claims - Level: 185K to 205K

The consensus sees claims back up to 204K, a more normal level, after a surprising 22K drop to 187K last week.

US Personal Income and Outlays for June (Thu 0830 EDT; Thu 1230 GMT)

Consensus Forecast, Personal Income - M/M: 0.3%

Consensus Range, Personal Income - M/M: 0.1% to 0.5%

Consensus Forecast, Personal Consumption Expenditures - M/M: 0.4%

Consensus Range, Personal Consumption Expenditures - M/M: 0.1% to 0.4%

Consensus Forecast, PCE Price Index - M/M: -0.1%

Consensus Range, PCE Price Index - M/M: -0.2% to 0.0%

Consensus Forecast, PCE Price Index - Y/Y: 3.7%

Consensus Range, PCE Price Index - Y/Y: 3.6% to 3.7%

Consensus Forecast, Core PCE Price Index - M/M: 0.2%

Consensus Range, Core PCE Price Index - M/M: 0.1% to 0.3%

Consensus Forecast, Core PCE Price Index - Y/Y: 3.3%

Consensus Range, Core PCE Price Index - Y/Y: 3.2% to 3.4%

Core PCE prices seen up 0.2 percent on the month while overall PCE prices down 0.1 percent as oil product prices fell back in June.

Friday

Japan Tokyo CPI for July (Fri 0830 JST; Thu 2330 GMT; Thu 1930 EDT)

Consensus Forecast, CPI - Y/Y: 1.8%

Consensus Range, CPI - Y/Y: 1.8% to 1.9%

Consensus Forecast, Ex-Fresh Food - Y/Y: 1.8%

Consensus Range, Ex-Fresh Food - Y/Y: 1.7% to 1.8%

Consensus Forecast, Ex-Fresh Food & Energy - Y/Y: 2.0%

Consensus Range, Ex-Fresh Food & Energy - Y/Y: 1.9% to 2.1%

Japan Unemployment Rate for June (Fri 0830 JST; Thu 2330 GMT; Thu 1930 EDT)

Consensus Forecast, Rate: 2.5%

Consensus Range, Rate: 2.4% to 2.5%

Japan Industrial Production for June (Fri 0850 JST; Thu 2350 GMT; Thu 1950 EDT)

Consensus Forecast, M/M: 0.5%

Consensus Range, M/M: 0.3% to 1.8%

Consensus Forecast, Y/Y: 3.4%

Consensus Range, Y/Y: 3.2% to 4.7%

Japan Retail Sales for June (Fri 0850 JST; Thu 2350 GMT; Thu 1950 EDT)

Consensus Forecast, M/M: -1.7%

Consensus Range, M/M: -2.0% to -1.2%

Consensus Forecast, Y/Y: 2.6%

Consensus Range, Y/Y: 1.8% to 5.2%

China CFLP Composite PMI for July (Fri 0930 CST; Fri 0130 GMT; Thu 2130 EDT)

Consensus Forecast, Manufacturing Index: 49.9

Consensus Range, Manufacturing Index: 49.6 to 50.4

Consensus Forecast, Non-Manufacturing Index: 50.0

Consensus Range, Non-Manufacturing Index: 49.5 to 50.3

Manufacturing PMI seen at 49.9 and nonmanufacturing at 50.0 in July, indicating no growth from June.

Japan Bank of Japan Announcement (Fri 1130 JST; Fri 0230 GMT; Thu 2230 EDT)

Consensus Forecast, Change: 0 bp

Consensus Range, Change: 0 bp to 0 bp

Consensus Forecast, Level: 1.00%

Consensus Range, Level: 1.00% to 1.00%

The bank is expected to leave rates unchanged this time even as speculation builds that a rate increase is coming.

Germany Unemployment Rate for July (Fri 0955 CEST; Fri 0755 GMT; Fri 0355 EDT)

Consensus Forecast, Rate: 6.3%

Consensus Range, Rate: 6.3% to 6.3%

A flat jobless rate at 6.3 percent is the call.

Eurozone HICP Flash for July (Fri 1100 CEST; Fri 0900 GMT; Fri 0500 EDT)

Consensus Forecast, HICP - Y/Y: 2.9%

Consensus Range, HICP - Y/Y: 2.7% to 3.0%

Consensus Forecast, Narrow Core - Y/Y: 2.4%

Consensus Range, Narrow Core - Y/Y: 2.4% to 2.5%

CPI expected higher at 2.9 percent on year in the July flash versus 2.8 percent in June.

Canada Monthly GDP for May (Fri 0830 EDT; Fri 1230 GMT)

Consensus Forecast, M/M: 0.2%

Consensus Range, M/M: 0.1% to 0.4%

The consensus sees GDP up 0.2 percent on the month in May.

US Employment Cost Index for Second Quarter (Fri 0830 EDT; Fri 1230 GMT)

Consensus Forecast, Q/Q: 0.8%

Consensus Range, Q/Q: 0.7% to 0.9%

ECI seen up 0.8 percent on quarter, a standard increase, versus 0.9 percent in Q1.

US Chicago PMI for July (Fri 0945 EDT; Fri 1345 GMT)

Consensus Forecast, Index: 55.0

Consensus Range, Index: 54.0 to 57.1

The Chicago purchasers index is expected down slightly but still showing good expansion at 55.0 from 56.7 in June.

US Consumer Sentiment for July (Fri 1000 EDT; Fri 1400 GMT)

Consensus Forecast, Index: 54.2

Consensus Range, Index: 53.5 to 54.4

Sentiment seen down marginally at 54.2 in the July final from 54.4 in the preliminary July report.