After sinking to its lowest level since the start of 2015, the US dollar faces a huge test this week as markets look to key CPI inflation data for a signal about where the Federal Reserve could be about to take monetary policy.
US CPI
The big macroeconomic data comes from the US in the shape of consumer price inflation figures for the last month. The data is a key marker for the US Federal Reserve’s monetary policy as it aims to achieve its inflation target of 2%.
At its last meeting the FOMC noted that it is ‘monitoring inflation developments closely’. This was the first real signal the Fed could be about to blink and is no longer convinced that the strong labour market is enough to get inflation to its target rate. This would chime with the hidden slack we know is in the labour market, which is keeping a lid on wages and therefore inflation.
RBNZ
The Reserve Bank of New Zealand meets on Thursday (Wednesday in Europe) with markets once again expecting no change in rates. But we’re looking for any further commentary from the central bank on the exchange rate after the kiwi rose to its strongest level in more than two years against the US dollar despite inflation in the three months to June falling to zero.
Earnings
Corporate earnings season has peaked but there is no shortage of S&P 500 and FTSE 350 stocks reporting this week. Highlights on Wall Street are the big retailers - JC Penney (NYSE:JCP), Nordstrom (NYSE:JWN) and Macy’s (NYSE:M); all of which are struggling as they wrestle with the disruptive effect of Amazon (NASDAQ:AMZN) on the sector. These earnings reports could make for some interesting reading. Worldpay (LON:WPG), Paddy Power Betfair (LON:PPB) and DFS Furniture (LON:DFSD) are among the highlights in a smattering of FTSE releases this week.
UK manufacturing
For sterling, cable holding around the $1.32 level reached last week will depend on the economic data remaining firm despite all the Brexit uncertainty. This week’s test comes in the shape of Thursday’s official manufacturing production figures and goods trade balance.
(All times BST)
Monday, 7 Aug
04:00 - New Zealand inflation expectations
08:15 - Swiss CPI inflation
08:30 - UK Halifax house price index
09:30 - Eurozone Sentix investor confidence
Tuesday, 8 Aug
Tentative - China trade balance
00:01 - UK BRC retail sales monitor
02:30 - Australia NAB business confidence
15:00 - US Jolts job openings
Wednesday, 9 Aug
Tentative - UK inflation report hearings
02:30 - China CPI and PPI inflation
07:00 - Japan preliminary machine orders
07:45 - French government budget balance
09:00 - Italian industrial production
13:30 - Canada building permits
13:30 - US preliminary nonfarm productivity, unit labour costs
15:30 - US crude oil inventories
22:00 - Reserve Bank of New Zealand official cash rate, rate statement
23:00 - RBNZ press conference
Thursday, 10 Aug
00:01 - UK RICS house price balance
00:50 - Japan core machinery orders, PPI inflation
07:45 - French industrial production
09:30 - UK manufacturing production, goods trade balance
13:30 - US PPI inflation, weekly unemployment claims
Friday, 11 Aug
07:00 - German final CPI inflation
07:45 - French final CPI inflation
13:30 - US CPI and core CPI inflation
Corporate Calendar
Tuesday, 8 Aug
Worldpay Group (WPG) - Interim results, EPS estimate 0.053
PaddyPower Betfair (PPB) - Interim results
Morgan Sindall Group (MGNS) - Interim results
TP ICAP (LON:NXGN) (TCAP) - Interim results
Bellway (LON:BWY) - Trading update
Pets at Home Group (PETS) - Trading update
Wednesday, 9 Aug
Mylan NV (MYL) - Q2/2017, EPS estimate 1.171
G4S (CO:G4S) (GFS) - Interim results
Legal & General Group (LON:LGEN) - Interim results
Thursday, 10 Aug
Macy’s (M) - Q2/2018, EPS estimate 0.449
Nordstrom Inc (NYSE:JWN) - Q2/2018, EPS estimate 0.634
Snap Inc (NYSE:SNAP) - Q2/2017, EPS estimate -0.149
DFS Furniture (DFS) - Final results
Amec Foster Wheeler (AMFW) - Interim results
Coca-Cola European Partners (CCE) - Interim results
Prudential (LON:PRU) - Interim results
TUI Travel (TT) - Q3/2017
Friday, 11 Aug
JC Penney Co Inc (JCP) - Q2/2018, EPS estimate -0.040