With Wall Street hitting peak vacation season, it is a quiet week for news. The key economic release this week is CPI inflation on Tuesday. There are several scheduled speaking engagements from Fed officials this week. Many will be looking for signs of hawkishness Minutes from the July FOMC meeting will be released on Wednesday.
It’s a quiet start today with nothing notable out of Europe and just the NY Fed Empire manufacturing survey, which missed expectations of a rebound to 2.5%, printing at -4.21, and NAHB housing market index (60 expected; 59 previous) for August to watch in the US.
Tuesday will see nothing significant out of Asia, but Europe is busier with a UK inflation data dump for July and the German ZEW survey report for August due. Over in the US we will see housing starts, industrial production and CPI data for July.
Wednesday brings us labour data for the UK in the form of jobless claims, earnings and unemployment numbers. There’s no data out of the US but the Fed will release what many see as the most important release this week out of the US, the minutes for the July FOMC meeting.
Thursday kicks off in Asia with trade data out of Japan. Over in Europe we will see July retail sales data out of the UK and July CPI numbers for the Eurozone. The US will see more jobless claims numbers for the second week of August, as well as the Philadelphia Fed Business Outlook for August.
It’s a quiet end to the week, as Friday opens in Japan with the June print for the All Industry Activity Index due. Over in Europe we will see the July PPI print for Germany while there is no data due in the US.
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A tabular summary of just the key US events:
And global:
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A quick recap of the two key events on deck, the Fed’s minutes as well as a blast of UK hard data:
Hawkish Fed Minutes?
The FOMC minutes and next week’s Jackson Hole symposium will attract close attention from markets looking for insight into the Fed’s current assessment of the policy outlook. The minutes of the 27 July FOMC meeting will be of particular interest, having increasingly become a policy tool, and at times sending a different message than the statement. Overall we expect a more hawkish tone than the statement as Fed officials emphasize that downside risks have abated and that the US data have generally been positive. We do not expect the minutes to imply an imminent hike however.
UK data, BOE QE
We see the first post-Brexit ‘hard data this week, in the form of July CPI, retail sales and the July claimant count of the labour market report. While it is too early to see much impact of the fall in GBP on inflation, and soft data so far suggests that consumers haven’t reacted as much as firms to the Brexit vote, the data will get increased attention. Following last week’s uncovered long end BoE operation, BoE QE operations will also be under scrutiny, though we do not expect another failed reverse auction.
In other data – looking 2 weeks ahead
In the US, in addition to the FOMC minutes, this week brings CPI, housing data, empire manufacturing and IP. Next week focus will turn to Jackson Hole, but we also see the second release of Q2 GDP as well as durable goods and trade balance.
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Finally, courtesy of Goldman, here is a detailed preview of US events, alongside expectations:
The key economic release this week is CPI inflation on Tuesday. There are several scheduled speaking engagements from Fed officials this week. Minutes from the July FOMC meeting will be released on Wednesday.
Monday, August 15
- 08:30 AM Empire Manufacturing, August (consensus +2.5, last +0.6): Consensus expects a modest uptick in the Empire Manufacturing survey, which declined in July. The stabilization of most manufacturing surveys in June and July from depressed levels in May suggests that US manufacturing has turned a corner and is now expanding at a moderate pace.
- 10:00 AM NAHB housing market index, August (consensus 60, last 59): The NAHB homebuilders’ index—which we have found to be a decent leading indicator of housing starts—edged down last month, but still remains near its post-crisis highs.
- 4:00 PM Total Net TIC Flows (last -$11.0bn)
Tuesday, August 16
- 08:30 AM CPI (mom), July (GS +0.06%, consensus flat, last +0.22%); Core CPI (mom), July (GS +0.14%, consensus +0.2%, last +0.17%); CPI (yoy), July (GS +1.0%, consensus +0.9%, last +1.0%); Core CPI (yoy), July (GS +2.2%, consensus +2.3%, last +2.3%): We expect that core CPI rose by 0.14% in July, following a 0.2% gain in June. On a year-on-year basis, core CPI likely rose by a solid 2.2%. We estimate headline consumer prices increased by 0.06% last month, a slower pace than in June as energy prices fell. On a year-on-year basis, the headline index likely increased by 1.0%.
- 08:30 AM Housing starts, July (GS -2.5%, consensus -0.8%, last +4.8%); Building permits, July (consensus +0.6%, last +1.5%): We expect housing starts declined by 2.5% in July, following a +4.8% above-consensus increase in June that was driven by gains from both single-family and the more volatile multi-family segments. Housing starts have outpaced increases in building permits recently, implying a modest slowing in housing starts for July. Consensus expects new permits to rise +0.6% following a +1.5% gain in June.
- 09:15 AM Industrial production, July (GS +0.5%, consensus +0.3%, last +0.6%); Capacity utilization, July (GS 75.8%, consensus 75.6%, last 75.4%); Manufacturing production, July (GS +0.4%, consensus +0.2%, last +0.4%): We forecast industrial production increased by 0.5% (mom) in July.
- 12:30 PM Atlanta Fed President Lockhart (FOMC non-voter) speaks: Federal Reserve Bank of Atlanta President Dennis Lockhart will speak to the Rotary Club in Knoxville, Tennessee. Audience and media Q&A is expected.
Wednesday, August 17
- 01:00 PM St. Louis Fed President Bullard (FOMC voter) speaks: Federal Reserve Bank of St. Louis President James Bullard will give a speech on the U.S. economy and monetary policy at a wealth and asset management research conference in St. Louis. Audience and media Q&A is expected.
- 02:00 PM Minutes from the July 26-27 FOMC meeting: The July FOMC meeting statement suggested that near-term risks to the economic outlook have diminished. In the minutes, we will be watching out for (1) the committee’s assessment of the balance of risks, (2) any indications about the committee’s sense of urgency regarding rate increases in the near term.
Thursday, August 18
- 08:30 AM Initial jobless claims, week ended August 13 (GS 265k, consensus 268k, last 266k)
- Continuing jobless claims, week ended August 6 (last 2,138k)
- We expect initial jobless claims to remain roughly in line at 265k this week, near post-crisis lows. Last week, initial claims edged down, likely due to a pullback in Michigan following auto-plant shutdowns in prior weeks.
- 08:30 AM Philly Fed manufacturing index, August (GS +3.0, consensus +2.0, last -2.9): We expect the Philadelphia Fed manufacturing survey to move up to +3.0, after the index declined by almost 8 points to -2.9 in July.
- 10:00 AM Leading indicators, July (consensus +0.2%, last +0.6%)
- 10:00 AM New York Fed President Dudley (FOMC voter) speaks: Federal Reserve Bank of New York President William Dudley will give opening remarks on regional economic conditions at a press briefing. Q&A is expected.
- 04:00 PM San Francisco Fed President John Williams (FOMC non-voter) speaks: Federal Reserve Bank of San Francisco President John Williams will give a speech on the economic outlook at the Anchorage Economic Development Corporation Luncheon in Anchorage, Alaska. Audience and media Q&A is expected. Last week, President Williams said that the strategy of a gradual path of rate increases does include a hike this year and he remains hopeful that the Fed can execute a nice, soft landing over the next couple of years.
- 08:30 PM Dallas Fed President Kaplan (FOMC non-voter) speaks: Federal Reserve Bank of Dallas President Robert Kaplan will participate in a moderated Q&A session during a meeting of the Association for Financial Professionals at the Dallas Fed. There will be no media Q&A following the event.
Friday, August 19
- There are no major data releases.
Source: BofA, DB, Goldman
via http://ift.tt/2aU6wlY Tyler Durden