A big week of Central Bank rate decisions, data out of China, US inflation, US earnings, and global industrial production.
This week, the RBNZ, BoC, and BoJ meet on rates. There have been growing expectations of a rate hike later in the year for NZ and the BoC is expected to announce plans for tapering at this meeting. There will be several speeches by US Fed officials during the week including two days of testimony by Fed Chair Powell.
Late last week, the PBoC reduced the RRR by 50bps to further support the economy. CPI growth in China was weaker than expected for Jun, while new loan growth increased. Data out of China this week includes Q2 GDP, retail sales, trade, and industrial production.
US Inflation will be in focus this week with the CPI and PPI. CPI growth is expected to hold steady at 4.9%. Last week, the US Fed submitted its Monetary Policy report, noting:
Even though the pace of price increases has jumped in the first half of this year, recent readings on various measures of inflation expectations indicate that inflation is expected to return to levels broadly consistent with the FOMC’s 2 percent longer-run inflation objective after a period of temporarily higher inflation. That said, upside risks to the inflation outlook in the near term have increased. https://www.federalreserve.gov/monetarypolicy/files/20210709_mprfullreport.pdf
This week, the US Treasury will also commence payments of the expanded Child Tax Credit covering 39m households and approx. 88% of children in the US.
Other data releases of note this week will be industrial production for the US, Japan (final), China, and Europe. US retail sales for Jun will also be released this week – expecting a decline of -0.4% after a -1.3% decline in May.
The Australian labour market survey will be released this week for Jun. Expectations are for lower growth of +30k employment (after +115k last month) and the u/e rate to fall to 5%. There will be other Aus consumer and business sentiment readings out this week which might be important given the latest lockdown in the most populous Aus state (NSW).
This week, the US Treasury will settle $409bn in ST Bills, Notes, and Bonds raising approx. $31bn in new money for the week. Several ST Bill auctions have been reduced as the suspension of the US federal debt ceiling ends on 31 July.
More detail (including a calendar of key data releases) is provided in the briefing document – download the file here;
Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net
