On Monday 8th: German Balance of Trade
On Tuesday 9th: Australian Westpac Consumer Confidence Change, Australian NAB Business Confidence and American Fed Chair Powell Testimony
On Wednesday 10th: Chinese Inflation Rate YoY and Reserve Bank of New-Zealand monetary policy decision
On Thursday 11th: UK GDP MoM, American Core Inflation Rate YoY and American Inflation Rate YoY
On Friday 12th: American PPI MoM and American Michigan Consumer Sentiment Prel
Monday 8th of July
Germany's trade surplus narrowed slightly in April 2024, falling short of market expectations. The surplus came in at EUR 22.1 billion, down from a downwardly revised EUR 22.2 billion in March, and below the EUR 22.6 billion surplus anticipated by analysts. The decline can be attributed to a slowdown in export growth compared to imports. The next release of German trade data is for the month of May and is scheduled for 6:00 AM GMT.
Tuesday 9th of July
Australian consumer confidence showed tentative signs of improvement in June 2024, after a period of decline. The Westpac-Melbourne Institute Consumer Sentiment index edged up by 1.7% compared to May, reaching a three-month high of 83.6. This marks a shift from the 0.3% dip observed the previous month and represents the first increase in consumer sentiment since February 2024. The next release of the Westpac-Melbourne Institute Consumer Sentiment index is scheduled for 12:30 AM GMT.
Australian businesses grew more pessimistic in June 2024, with the NAB business confidence index falling to -3. This marks a sharp decline from the upwardly revised reading of 2 in April and represents the lowest level since November 2023. It's the first time the index has dipped into negative territory since then.
This negative sentiment suggests that the subdued economic activity experienced in the first quarter (Q1) might be continuing into the second quarter (Q2). Businesses across various sectors, including manufacturing, transportation, and construction, all reported a worsening outlook. Overall business conditions fell below average, indicating a general sense of difficulty.
The data also revealed that businesses are not anticipating a significant increase in demand soon, as forward orders remained negative. Additionally, they are facing rising costs on two fronts: labour and purchases. This squeeze on profit margins could further dampen business confidence.
Market participants are expecting a further decline in the NAB Business Confidence index for June, with forecasts predicting a drop to -5 to be released at 1:30 AM GMT.
The Federal Reserve maintained the federal funds rate unchanged for the seventh consecutive meeting in June 2024. This decision aligns with Fed Chair Jerome Powell's recent comments at a central banking forum in Sintra. While acknowledging some progress on curbing inflation, Powell emphasised the need for further evidence before considering rate cuts.
Investors and economists will be closely following Powell's upcoming semi annual testimony before the Senate Banking Committee on July 9th. This event is likely to provide valuable insights into the Fed's future monetary policy trajectory.His remarks could offer clues about the strength of the recent inflation slowdown and the conditions that would prompt the Fed to start lowering rates. The markets are particularly interested in any signals regarding the timing and pace of potential rate cuts in the coming months.
Wednesday 10th of July
China's annual inflation rate for May remained unchanged at 0.3% for the second consecutive month, falling short of market expectations of a slight increase to 0.4%. This marked the fourth straight month of consumer price growth, suggesting a continued but slow-paced recovery in domestic demand.
However, on a monthly basis, the Consumer Price Index (CPI) dipped by 0.1%. This marks the second time this year that the monthly CPI has declined, and it missed market forecasts of a flat reading, suggesting that price pressures might be easing somewhat in the short term.
Market participants are anticipating this trend to hold steady in June, with forecasts predicting an annual inflation rate of 0.3% to be released at 1:30 AM GMT.
The Reserve Bank of New Zealand (RBNZ) indicated in its May meeting that their efforts to control inflation are showing signs of success.
Restrictive monetary policy has helped to ease pressure on the economy's capacity and bring down consumer price inflation. The RBNZ anticipates inflation returning to their target range of 1% to 3% by year-end 2024.
However, despite this positive progress, the RBNZ opted to hold the official cash rate (OCR) at 5.50% for the eighth consecutive meeting. This marks the highest level for the OCR since 2008.
Market participants generally expect the RBNZ to maintain this rate when its next decision is announced at 2:00 AM GMT today.
Thursday 11th of July
The UK economy hit a pause in April 2024, failing to build on the 0.4% growth recorded in March. This flat performance,in line with market forecasts, marked the weakest showing in four months. The stagnation can be attributed to contrasting trends in different sectors.
Industrial output and construction both declined, dragging down overall growth. Production output, likely encompassing manufacturing, also fell. However, the services sector provided a bright spot. Services output continued its positive trajectory for the fourth consecutive month, indicating continued growth and resilience in this crucial part of the UK economy.
When the data is released at 6:00 AM GMT, market participants predict a modest increase of 0.1% in GDP growth.
Inflationary pressures in the United States showed tentative signs of cooling in May 2024. The annual core consumer price inflation rate, which excludes food and energy prices to provide a clearer picture of underlying inflation trends,dipped to 3.4%. This represents a three-year low and a welcome decline from the 3.6% rate recorded in April. The decrease also surpassed market expectations of 3.5%, suggesting a potentially faster-than-anticipated slowdown in inflation.
This moderation in inflation is positive news for both consumers and businesses. It could lead to some relief from rising prices, potentially boosting household spending power and easing cost pressures on companies.
Market participants predict the core inflation rate to fall to 3.2% in June when the data is released at 12:30 PM GMT. This suggests they believe the recent trend of slowing inflation might continue in the coming month. However, it's important to note that inflation remains above the Federal Reserve's target of 2%, so further monitoring and potentially more policy adjustments from the Fed might be necessary.
Another inflation data is expected to be released at 12:30 PM GMT: the American annual inflation rate. The latter measures the change in consumer prices over the past year, unexpectedly dipped to 3.3%. This marks the lowest level in three months and is a further decline from the 3.4% rate recorded in April. It's even lower than market forecasts of 3.4%, suggesting a potentially steeper-than-anticipated slowdown in price increases.
Major Earnings Releases:
● PepsiCo
● Delta Air Lines
Friday 12th of July
US factory gate prices, also known as producer prices, experienced a steeper-than-expected decline in May 2024. They fell by 0.2% compared to the previous month, defying market predictions of a slight rise of 0.1%. This follows a 0.5% increase in April. The decrease was particularly notable for goods prices, which witnessed their steepest decline since October 2023. This suggests a potential easing of inflationary pressures at the wholesale level.
However, the story wasn't entirely one of falling prices. Prices for final demand services, which encompass services delivered directly to consumers, remained unchanged after a 0.6% increase in April. This indicates a potential divergence between trends in goods and services inflation.
When the data is released at 12:30 PM GMT, market participants expect a rise of 0.2% in the Producer Price Index (PPI) for June. This suggests they believe the recent decline in factory gate prices might be temporary and that some upward pressure could return in the coming month.
Consumer sentiment in the US showed signs of improvement in June 2024, exceeding expectations. The University of Michigan's consumer sentiment index was revised upwards to 68.2, surpassing the preliminary reading of 65.6 and exceeding market forecasts of 65.8.
The positive revision stemmed from improvements in both the current conditions and expectations subcomponents of the index. This indicates that consumers felt better about the current state of the economy and are also more confident about its future prospects.
However, it's important to note that inflation expectations remained steady. The survey results showed that consumers' outlook on inflation for both the short and long term (one year and five years) haven't changed significantly, which suggests that while overall sentiment improved, concerns about inflation might be lingering.
Major Earnings Releases:
● JPMorgan Chase
● Wells Fargo
● Citigroup
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.