THE WEEK AHEAD

THE WEEK AHEAD: August 3-9

We have a full plate of critical economic data on deck for the week of August 3rd. Attached below is a snapshot of some (though far from all) of the headline numbers that we will be focused on.   

 SUNDAY/MONDAY August 3

  • US: ISM manufacturing and Manufacturing Price index data for July will arrive on Monday, as will July BAE Domestic Auto sales and June Construction Spending.

  • EURPOPE: German Retail sales are scheduled for release early Monday morning, as are July Manufacturing PMI data for Switzerland, Italy, France, Germany, UK and the Eurozone in aggregate.  

  • ASIA: On Sunday evening South Korean July Trade data will be released and, after the strong rebound in June industrial production released on Friday, we will be watching for more confirmation of recovering strength there (CPI and FX reserve data are scheduled for Monday).  China July CLSA PMI will be released on Tuesday evening. We initiated a new long CAF position in our portfolio on Friday and, with anecdotal reports of some marginal declines in demand for commodity imports, we will be intensely focused on this data point as a signal.  India trade data for June will be released on Monday; we remain bearish on long term prospects there but are anxious to see if imports are showing signs of stimulus driven demand for raw materials. Singapore July PMI is slated for released on Monday Morning.  

 TUESDAY August 4

  • US: BEA June Personal Income/PCE data will be released on Tuesday morning as will weekly ICSC and Redbook figures. Weekly ABC Consumer Comfort index levels are scheduled for 5PM.  

  • EUROPE:  Eurozone PPI data for June will be released on Tuesday morning.

  • ASIA: The RBA board will meet on Tuesday morning; ABS Balance on Goods and Services data for June will be released in the evening. Although we closed our long position in Australian equities last week it’s no secret that we are big fans of Glen Stevens and expect that he will act proactively despite any political pressure to keep rates low.

WEDNSDAY August 5

  • US: Census Bureau June Factory Orders and Factory Inventory data will be released on Wednesday morning as will the ISM Non-Manufacturing Index for July. Weekly MBA mortgage application and EIA Fuel Stock releases are also on the schedule for the day.

  • EUROPE: Eurozone June Retail Sales data released on Wednesday morning.  July Services PMI for Italy, France, Germany and the Eurozone in aggregate are also slated for released that morning along with the final Eurozone PMI Composite.  The UK has a slew of economic data releases scheduled, including NIESR GDP Estimates, Manufacturing and Industrial Production data for June and HBOS housing data. We still regard the UK as one of the weak hands at the table in Europe and will be watching closely for any marginal changes.

  • ASIA: Taiwan CPI for July will be released on Wednesday morning, as will FX reserves.  Australian Employment data for July will be released in the evening.  

THURSDAY August 6

  • US: As we said in last Thursday’s note “When Bad Is Good!” any increase in Initial Claims will add more pressure to the US Dollar and support stock and commodity prices (at time of writing, we are short the dollar via UUP and long gold in our portfolio). Consensus estimated for this week’s reading is a 10K decline from last week’s 584K new claims –we’ll see.

  • EUROPE:  German BBK Factory Orders for June and Italian June Industrial Production will be released on Thursday morning. We are long German equities and short Italian equities in our portfolio and expect German orders to show signs of recovery as Chinese led global industrial demand improvement starts to be felt in Europe’s strongest economy. The ECB has a rate announcement scheduled for 7:45 AM.

  • ASIA: On Thursday evening, the RBA will release a monetary statement as a follow up to Monday’s board meeting. Indian Weekly Wholesale Inflation data is released on Thursdays. With some core component prices rising in recent weeks, we will be watching for any marginal increase from last week’s -1.54% WPI reading.

FRIDAY August 7

  • US: July Payroll data and Unemployment Rate will be released at 8:30AM. The Federal Reserve Consumer credit measure for June will be released at 3PM.

  • EUROPE: Friday’s schedule will continue to test our long Germany/short Italy portfolio thesis with German June Trade and Production data and preliminary Italian Q2 GDP due out on Friday morning.  UK PPI and French Trade data are also on deck.

  • ASIA: We will be pouring through Taiwanese July Export data on Friday morning looking for more signals of increasing demand for consumer electronics and from China. On Sunday, Japanese June Machinery Orders, July M2 and Bank Loan data will be released. Chinese CPI and PPI readings for July are also scheduled for Sunday evening.

 

 


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