UK Data
- Monday 9.30am PPI Input & Output Prices for June. Actual 30.0y/y & 10.0%y/y
- Tuesday 12.01am RICS House Price Survey for June. Previous -92.9 index
- Tuesday 9.30am CPI for June. Previous 0.6%m/m & 3.3%y/y
- Wednesday 9.30am Average Earnings for May. Previous 3.8% 3-mth Av
- Wednesday 9.30am Claimant Count for June. Previous 9.0k
Sterling inched lower against the Euro last week after a string of weak economic data heightened the gloom surrounding the UK economy. British industrial production fell at its fastest rate in 2 ½ years in May, much weaker than forecasts and providing more evidence that the UK economy was headed for a sharp slowdown. Meanwhile, the Pound extended losses after British house prices fell by 2.0%m/m in June, according to the country’s largest mortgage lender HBOS, in a further sign that the housing market downturn is gathering pace. However, the Pound showed little reaction to the BoE’s widely expected decision to hold interest rates unchanged at 5.0%. The Bank did not explain the its decision as is usual whenever it leaves rates steady, but the on-hold verdict came as little surprise give the twin threats of a slowing economy and surging inflation. This week’s data set is likely to confirm record high inflation, house prices falling and an up-tick in unemployment.
US Data
- Tuesday 1.30pm Empire State Survey for July. Previous -8.7 index
- Tuesday 1.30pm PPI for June. Previous 1.4%m/m & 7.2%y/y
- Tuesday 1.30pm Retail Sales for June. Previous 1.0% m/m
- Wednesday 1.30pm CPI for June. Previous 0.6%m/m & 4.2%y/y
- Wednesday 2.00pm Treasury International Capital System (TICS) for May. Previous $115.1bn
- Wednesday 2.15pm Industrial Production for June. Previous -0.2%m/m
- Wednesday 7.00pm Fed release minutes from prior (24th-25th June) FOMC meeting
- Thursday 1.30pm Building Permits and Housing Starts for June. Previous 978k & 975k
- Thursday 3.00pm Philadelphia Fed Survey. Previous -17.1 index
The Dollar fell broadly last week as the oil price exceeded $147 per barrel and fears over the health of the US financial sector intensified, underscoring the unlikelihood of the Federal Reserve raising interest rates any time soon. US equities fell heavily on Friday amid reports that Fannie Mae and Freddie Mac, the country’s two largest mortgage providers would have to raise fresh funds. The Dollar received some respite after Bush said US Treasury Secretary Hank Paulson and the Fed were working hard on a solution. In a busy data calendar, inflation concerns will take centre stage this week with PPI and CPI both capable of posting upside surprises.
EU Data
- Monday 10.00am Industrial Production for May. Previous 0.9%m/m & 3.9%y/y
- Tuesday 10.00am German ZEW Survey (Economic Sentiment) for July. Previous -52.4 index
- Wednesday 10.00am HICP (Final) for June. Previous 0.6%m/m & 3.7%y/y
The Euro closed in on record highs against the Dollar last week, despite a slight downgrade in the Q1 Eurozone economic growth figure. GDP in the 15-country trading block rose 2.1% in annual terms compared with the 2.2% estimated in June. Eurozone inflation for June is likely to be confirmed at a record high of 4.0%y/y on Wednesday, with a surging oil price reigniting speculation of another ECB rate hike later this year.
Interest rate outlook
| Country |
Current rate |
Last change |
Date of change |
Next meeting |
| UK (MPC) |
5.00% |
-25bps |
10/04/08 |
7th August |
| US (FED) |
2.00% |
-25bps |
30/04/08 |
5th August |
| EU (ECB) |
4.25% |
+25bps |
03/07/08 |
4th September |