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The Week Ahead: UK inflation data & FOMC minutes to provide central bank steer as Alibaba delivers fresh AI China read
Your guide to the trading calendar over the week of 17 - 21 July.
Note: This is marketing material. This article is not investment advice, capital is at risk.
The last week has seen a cooling in US inflation that's driven the S&P 500 to a new all-time high. UK equities have had a tougher time as mining stocks came under pressure. Meanwhile the AI hardware trade has picked up some fresh momentum.
Britain's CPI inflation report will be among the highlights on the macroeconomic calendar as investors try to figure out whether the Bank of England is any closer to raising or cutting rates. FOMC minutes will offer fresh insight into what the Fed is thinking and results from Walmart, Alibaba and BHP are due up.
Here’s the key events to watch over the next week.
Monday, 17 Aug
The week kicks off with preliminary growth, industrial production and GDP price index data from Japan. These figures will be closely watched overnight as investors look to see how aggressive the Bank of Japan can go to defend the yen from further weakening. China's fixed asset investment, industrial production and retail sales data is due out as well.
UK house price data from Rightmove is out early in an otherwise blank session for European data. Afterwards it's the Canada CPI inflation report, US house price data and Empire State manufacturing index. Earnings from minging giant BHP are due up.
Tuesday, 18 Aug
There was a flicker of light from the UK's labour market in a recent survey – official data out early Tuesday will show whether it's a false dawn or not. So far this year the data has hardly been encouraging – the UK saw no jobs growth in the three months to May, and the slowest wage growth in five years, data last month showed. Hiring remained weak as vacancies fell and payrolls declined again as the unemployment rate held steady at 4.9%. The employment and wages data will be closely watched by the government (more taxes?) and the Bank of England (is it further away on inflation or the economy?). The Home Depot reports earnings.
Wednesday, 19 Aug
UK CPI inflation data for July is the main macroeconomic event. Having unexpectedly fallen to a 15-month low 2.6% in June, investors will be hopeful that the high watermark for the current cycle has been reached already. However, the re-escalation in US-Iran tensions, which has sent energy prices higher again, suggests we could see rising petrol and heating costs nudge the headline CPI number back towards 3%.
Stateside, the minutes of the FOMC's July meeting will be pored over for clues about how policymakers are thinking. The minutes take on added significance as chair Kevin Warsh has refrained from offering the usual forward guidance markets have become accustomed to and because there was an unusually large body of dissent, with three members voting to raise rates. The Federal Reserve left rates on hold and recent inflation data has shown a cooling in price pressures; nevertheless, a rate hike in September is far from off the table. Ithaca Energy, Lowe's, TJX and Target report earnings.
Thursday, 20 Aug
The calendar is relatively light with Australian employment data, German wholesale inflation figures, US weekly unemployment claims and the Philly Fed manufacturing index the main events. Earnings are due from Walmart and Alibaba.
Friday, 21 Aug
PMI day: Flash surveys for manufacturing and services activity will shape the market's view of the global economy. We will pay close attention to the price components to watch for signs of a buildup of inflationary pressures.