Chock-a-block Global Economic Calendar Today
Today is a pretty busy day for the release of new economic numbers across the globe. All the data points set to release today carry the potential to affect investor sentiment and will set the tone for the week ahead. The stream of economic releases begins its journey from the UK, with the just out data showing that UK’s annual consumer price index (CPI) advanced in July. Further, the nation’s producer prices rose more than expected during the same month.
Post this, before market participants can even understand the true impact of the just released data, they will be hit by another set from the other side of the English Channel. This refers to the Eurozone and Germany’s ZEW economic sentiment index for August. Later, as the day draws to a close, a host of US economic releases will hit the wires. In fact, this is the major risk event for today - the US CPI for July along with the nation’s housing starts and industrial production data is up for release.
Pound Sterling – UK Markets
The Pound is trading higher against the US Dollar and the shared currency this morning, after the just out data showed that UK’s annual CPI rose above expectations to a 20-month high level in July. However, on a monthly basis, consumer prices contracted in July. In June, Britain’s CPI advanced more than anticipated after holding steady in April and May. The sudden surge in the cost of living came in part due to soaring air fares, which were pushed higher by expensive flight costs to Europe. Separately, UK’s manufacturing inflation indicator rose to a two-year high level in July compared to that of the previous month while the retail price index, which also includes Britain’s house prices, surprisingly advanced in July.
Later this week, market participants will look forward to the release of more post-Brexit data out of the UK. This in particular includes the nation’s retail sales data for July.
US Dollar – US Markets
The greenback is trading on a weaker footing against the Euro and the Pound this morning. Last week’s downbeat US retail sales data has indicated that the US economy may not be ready for higher lending rates. Moreover, yesterday’s disappointing NY Empire State manufacturing index helped further underpin this thought. In contrast, US homebuilder sentiment improved in August from July, suggesting that low mortgage rates and a strengthening labour market will continue to keep the housing sector on the growth path during the remaining part of the year. Separately, the San Francisco Fed President, John Williams, opined that central banks should come up with new policies in response to an economic downturn, when both inflation and interest rate remain low.
Moving ahead, market participants look forward to the US consumer prices, industrial production and housing starts data, set to release later in the day, to further gauge the health of the nation’s economy.
Euro – European Markets
The shared currency is mixed against its major peers this morning. The Euro is seen surging ahead of the crucial 1.12 and the 0.87 handle against the US Dollar and the Pound, respectively. The Eurozone is set to witness its first big release of the week in the form of the ZEW economic sentiment index, which indicates investors’ opinions for the next six months. Germany’s economic sentiment indicator had shocked with a decline to a four-year low level in July, reflecting the turmoil on the Eurozone’s largest economy following the surprise Brexit vote. A month later, the Brexit blowback for the Eurozone looks less severe and the index is expected to bounce back in August. The German current situation index is also likely to post an increase in August.
Another important data point that is awaited by market participants is the Eurozone’s trade balance data for June, scheduled to release in a short while.
Other Currencies – Highlights
The Australian Dollar has extended its previous session gains against the US Dollar this morning, following the release of the Reserve Bank of Australia’s (RBA) August monetary policy meeting minutes and as the recent string of disappointing US economic reports continues to weigh broadly on the greenback. As per the minutes, the RBA indicated that Australia’s economic growth is expected to pick up above estimates by mid-2017. This was in contrast to the central bank’s earlier statement that projected growth would pick up in 2018. Further, the board members agreed that a quarter point cut in the official rate was necessary to boost the nation’s economic growth. However, the minutes did not ring any alarm bells as the RBA stopped short of providing an outlook for interest rate. The central bank held its forecasts for inflation, unemployment and growth broadly unchanged from May and mentioned that Australia’s unemployment rate would remain at around current levels over the coming months.
Going ahead, Australia’s unemployment rate and the Westpac leading index are scheduled for release this week.