14th August 2017 - 18th August 2017
It was a quiet start of the week as there no major data coming out for today except from the Industrial Production released by the Eurostat. It shows the volume of production of Industries such as factories and manufacturing. Up trend is regarded as inflationary which may anticipate interest rates to rise. The day will begin with the Asian morning, as the RBA releases the minutes of its latest policy gathering. Perhaps the most noteworthy point was the officials' discomfort with the latest AUD appreciation, followed by EU GDP due for release. In particular, the Annual EU GDP figures will be relatively illuminating given that the Eurozone economy has continued to firm of late and speculation is rampant over near term monetary policy changes. Later in the day, will be key for the Pound, as the United Kingdom will release its July inflation figures at all levels, with CPI, PPI and the retail price index being out. Market's expectations point for another flat reading monthly basis, but an uptick in yearly inflation, thus this last needs to be quite significant to bring a rate hike back to the table. Day starts with reports coming from UK, employment data for June will attract attention. The forecast is for the unemployment rate to have remained unchanged, while wages are anticipated to have risen at the same pace as previously. In the US, dollar traders will have their gaze locked on the minutes of the latest FOMC meeting. The statement accompanying that decision had few changes compared to the previous one. The only changes related to the inflation outlook and the timing of the balance sheet normalization. On Thursday, during the Asian morning, Australia's employment data for July are due out. Even though further tightening in the labor market would probably be very encouraging for the RBA, we think that market focus will be mainly on the wage data. As we already outlined, they could play the biggest role in determining the Bank's policy stance over the next months, this will be followed by U.S. Philly Fed figures are due for release late in the week and, given the recent trend of poor economic data, could bring about some significant volatility for the pair if a miss is evident. During the European day, we get the UK retail sales for July and expectations are for both the headline and the core figures to have slowed from the previous month. The forecasts are supported by the declines in the TR/IPSOS and the Gfk consumer sentiment indices for July The day with no major data reports, except from Canada's CPI data for July. In the absence of any forecast, we see the case for the core inflation rate to have declined. We base our view on the fact that the Markit manufacturing PMI for the month showed that output-charge inflation moderated for the third month. With regards to the headline rate, we believe that it may have remained unchanged as the rebound in the yearly changes of oil prices may have offset some of the aforementioned softness. In any case, even if core inflation slows further, we doubt that it will alter expectations for another BoC hike this yearMonday
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