EVENTS TO COME:
- Monday: German IFO.
- Tuesday: American consumer confidence.
- Wednesday: BoJ meeting minutes, Australian monthly CPI, US durable goods orders.
Australian retail sales, final US second-quarter GDP, US jobless claims.
- Friday: Tokyo Japan CPI, Japan unemployment rate, Japan retail sales, UK final Q2 GDP, Eurozone CPI, Canada GDP, US core PCE.
US consumer confidence is expected to fall further to 105.6 from 106.1 previously. The previous report noted a huge shortfall, and coupled with the great lack of job openings in the United States, it hinted at a notable slowdown in the job market. In fact, compared to the University of Michigan Consumer Sentiment Survey, which shows more of how consumers view their personal finances, the Consumer Confidence Survey shows how consumers view the job market.
Australia’s monthly CPI is expected to reach 5.2% from 4.9% previously. This is mainly due to rising energy prices and is something the RBA already expects to happen in the third quarter. Rising energy prices and increased mortgage payments are expected to lower consumption and weigh on economic growth.
Unemployment claims in the United States again far exceeded expectations last week. The labor market seems to be balancing, but it still remains quite tight. Consensus for this week calls for initial claims at 217,000 vs. 201,000 and continuing claims at 1,675,000 vs. 1,662,000.
Eurozone one-year CPI is expected at 4.5% versus 5.2% previously, while core one-year CPI is expected at 4.8% versus 5.3% previously. Unless the numbers explode, this report is unlikely to change anything for the ECB, which clearly tends to keep rates higher for longer.
US PCE for the year is expected to rise to 3.5% from 3.3% previously, while the M/M figure is expected to rise to 0.5% from 0.2% previously. The Core PCE Y/Y, which is the Fed’s preferred inflation measure, is expected at 3.9% from 4.2% previously, while the M/M figure is expected at 0.2% from 0, 2% previously.