You ready for the Boom? Yeah, this week’s economic calendar has a lot of news to look forward to, both in the US and globally. And with so much in store for markets it can be tough to differentiate between items of importance and noise so let’s review the oncoming macro data for the week ahead to meet it with clarity.
Tuesday
Tuesday morning kicks off the weekly economic calendar with German CPI for July, a broadly followed measure of inflation that is updated each month but expressed as a yearly figure. Last month’s report registered 1.8%, while expectations for July come in at 1.7%. Given Germany’s status as the Euro-zone’s largest economy, changes to CPI have a significant impact on Euro-zone inflation in aggregate; and play a major role in future ECB decisions.
Following this, July U.S. Consumer Confidence is released at 10:00 a.m. ET This report is closely correlated historically with consumer spending (i.e. higher confidence usually corresponds to an uptick in spending, and vice versa), a key driver of GDP. Expectations for the current month are in line with June’s print of 81.4.
Wednesday
If Tuesday is moderately eventful: Wednesday is packed with data. The economic calendar kicks off early in Europe with Germany’s unemployment report, followed by July’s Euro-zone CPI read. These releases have historically generated moderate market volatility; but this month are expected to remain flat with German unemployment forecast at 6.8% (unchanged v. the previous month) and Euro-zone CPI at 1.2% (vs. 1.2% last month).
In the US, the highly anticipated Q2 2013 Advance GDP print is released at 8:30 a.m. ET. Expectations are for a print near +1%; but there has been speculation about a negative print that could weigh heavily on the Fed’s schedule for when tapering will begin. Speaking of the Fed: the FOMC will convene July 30-31 for its fifth policy meeting of the year, with its rate decision and accompanying statement set for release at 2:00 p.m. ET. Little is expected of this FOMC meeting, but the Fed’s QE program and taper talk will mean this get-together receives special attention.
Later in the evening, Chinese Manufacturing PMI is released at 9:00 p.m. ET with a move expected from 50.1 last month across the all-important 50 level into slight contraction at 49.8.
Thursday
Focus on central banks moves across the pond Thursday morning with rate decisions due from the Bank of England (BoE) and then the European Central Bank (ECB). In the case of the BoE, its overnight rate and level of QE are expected to remain unchanged, at .50% and $375B respectively. Shortly after, the ECB will issues its own rate decision with no major changes expected.
Later in the morning, US ISM Manufacturing is released at 10:00 a.m. ET. Historically this is a much-watched report due to its analysis of labor conditions and the sentiment towards inflation that it reveals. Expectations this time around are for a modest uptick to 52.0 v. 50.9 in June.
Friday
The U.S. Employment Report on Friday morning rounds out this exciting week with estimates calling for a 185K and an unemployment rate of 7.5%, compared to 195K and 7.6% the month previous.
As important as these reports are in other circumstances, remember that US growth, inflation and employment information released this week will certainly weigh on Fed decision-making, including taper timing in the coming weeks.
Hopefully this review helps to clarify what to watch out for in the days ahead. Thanks for reading and have a good week!
Twitter: @WCWrenn024 and @seeitmarket
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
