Key events and numbers for next week – Danske Bank

Ahead of next week, analysts at Danske Bank, see that the trade war will continue to be in focus, also that any comments by members of the Federal Reserve and the European Central Bank will be scrutinized for signals of how much easing is in the pipeline. Regarding economic numbers, they noted next week are due: German ZEW, euro-area GDP for Q2, US core inflation and Chinese numbers on industrial production and retail sales. 

Key Quotes: 

“The US next week is quiet in terms of data releases. CPI core is due out Tuesday and we expect it rose +0.2% m/m in July which translates into an unchanged annual inflation rate at 2.1% y/y.”

“In the euro area, the focus turns to the German Zew (Tuesday) and the GDP figures, most notably in Germany (Wednesday). We expect the Zew to continue to point to a gloomy outlook in the uncertain global environment. On Wednesday we expect an unchanged euro area GDP growth figure from the advance estimate (0.2% q/q), but with the first release of the drivers we will assess if investments are still holding up amid the global uncertainty. Furthermore, the ailing German economy will publish its first Q2 GDP estimate. We expect 0.1%, but we acknowledge a downside risk to our forecast. Even the risk of a sub-zero reading cannot be excluded at this stage.”

“Financial market attention will once again also be on the unstable Italian political situation after the recent calls for new elections by League leader Salvini.”

“Next week in the UK, the labour market report for June is due out on Tuesday and CPI inflation in July is due out Wednesday. While the releases are important, the focus remains on Brexit and how it will develop over the autumn.”

“There are no market movers in Japan next week.”

“The focus in China continues to be on the trade war with the US, where things went sharply downhill last week. We expect the matter to go on the backburner for a while as both sides probably want to calm things down a bit to keep talks scheduled for September on track (...) On the data front, we have the batch of industrial production, retail sales and fixed asset investments, which always come on the same day. In line with consensus we expect the data still to paint a soft picture of the Chinese economy, but not a hard landing. Retail sales growth moved sharply higher but we expect it to fall back to around 8-8½% in July. New home prices will probably show a still robust pace of increase as they are underpinned by low inventories of houses.”