UK Data
- Monday 8.00am Halifax House Prices for June previous 0.3%m/m
- Monday 9.30am CIPS Manufacturing PMI for June previous 54.9% bal.
- Thursday 12.00pm Bank of England interest rate decision
- Friday 9.30am Industrial Production for May 0.3%m/m
- Friday 9.30am Manufacturing Production for May previous 0.3%m/m
The focus last week was on the UK housing market where data showed that the market remains buoyant despite four rate increases in the past ten months. The Nationwide House Price survey (11.1%y/y) showed its largest gain since January 2005 and mortgage approvals (114k) showed their first monthly increase since January. However, CBI Distributive Trades (+17) showed its lowest reading since November 2006 indicating that increased borrowing costs are beginning to have an impact on consumer spending. The main highlight this week will be the Bank of England interest rate decision where the outcome will be a close call following the unexpectedly tight (5-4) vote last month.
US Data
- Monday 3.00pm ISM Manufacturing Survey for June previous 55.0
- Thursday 1.15pm ADP Employment Survey for June previous 97.0k
- Thursday 3.00pm ISM Non-Manufacturing Survey for June previous 59.7
- Friday 1.30pm Non Farm Payrolls for June previous 157.0k
- Friday 1.30pm Unemployment Rate for June previous 4.5%
Last week saw the FOMC leave interest rates unchanged at 5.25% as risks to the economy remain finely balanced. In the accompanying statement, Bernanke remained upbeat about economic growth and suggested that the committee will continue to closely monitor inflationary pressures. Otherwise, data was generally disappointing with evident of further weakness in the housing market. Both existing (5.99m) and new (925k) home sales came out below market expectations as did consumer confidence (103.9) which came out at a fourteen month low. This week, attention turns to the employment report where the market will be looking for signs that a tight labour market could drive up price pressures.
Euro Data
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Monday 9.00am EU Manufacturing PMI for June previous 55.0
-
Tuesday 10.00am EU PPI for May previous 2.4%y/y
-
Tuesday 10.00am EU Unemployment for June previous 7.1%
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Wednesday 9.00am EU Services PMI for June previous 57.3
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Wednesday 10.00am EU Retail Trade for May previous 0.2%m/m
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Thursday 12.45pm ECB Interest Rate Announcement followed by press statement at 1.30pm
Last week’s calendar was relatively scant with both EU retail PMI (48.2) and Flash HICP inflation (1.9%y/y) coming out in line with expectations. This week, the main event will be the ECB interest rate decision where we expect rates to remain on hold at 4.00%. The key however, will be in the accompanying statement where the market will be looking for any indication as to the likelihood of further monetary tightening in the months ahead.
Interest rate outlook
| Country |
Current rate |
Last change |
Date of change |
Next meeting |
| UK(MPC) |
5.50% |
+25bps |
10/5/07 |
5th July |
| US (FED) |
5.25% |
+25bps |
29/06/06 |
7th August |
| EU (ECB) |
4.00% |
+25bps |
06/06/07 |
5th July |