UK Data
- Monday 9.30am Net Consumer Credit for June previous £0.8bn
- Monday 9.30am Mortgage Approvals for June previous 114k
- Tuesday 11.00am CBI Distributive Trades Survey for July previous 17.0% bal.
- Wednesday 9.30am CIPS Manufacturing PMI for July previous 54.3% bal.
- Thursday 12.00pm BoE MPC Interest Rate Decision
- Friday 9.30am CIPS Services PMI for July previous 58.1
The focus last week was on the housing market where both the Rightmove (10.3%y/y) and Nationwide (9.9%y/y) house price indexes showed signs that five rate hikes from the MPC in the past eleven months are starting to bite. Sterling, which now falls into the ‘high yielding’ category, also suffered as the speculative market looked to move out of the carry trade. This week, the market will focus on the BoE interest rate announcement where a vote of no change is widely expected following last month’s hike.
US Data
- Tuesday 2.45pm Chicago PMI for July previous 60.2
- Wednesday 1.15pm ADP Employment Survey for July previous 150k
- Wednesday 3.00pm ISM Manufacturing Survey for July previous 56.0
- Friday 1.30pm Non Farm Payrolls for July previous 132k
- Friday 1.30pm Unemployment Rate for July previous 4.5%
- Friday 3.00pm ISM Non Manufacturing PMI for July previous 60.7
Last week was a week of two halves for the Dollar. The US currency began the week on the back foot, continuing its downward trend seen of late. However, this was followed by widespread risk aversion in the financial markets where the high yielding currencies (e.g. AUD, NZD, GBP, ZAR, etc.) all lost ground to the Yen and the Dollar. Data, despite being mixed, was largely ignored with the market focused on external influences. Both existing (5.75m) and new (834k) came out below expectations continuing the recent downtrend in the US housing market. However, Friday saw that not all is bad with the US economy when Q2 GDP (3.4%q/q) showed a marked improvement from initial readings. The Core PCE Price Index (1.4%q/q) came out in line with expectations however this is still likely to prevent the Fed from cutting rates. This week attention turns to the US employment report following a strong set of numbers last month.
Euro Data
- Tuesday 10.00am EU Flash HICP Inflation for July previous 1.9%y/y
- Tuesday 10.00am EU Unemployment for July previous 7.0%
- Tuesday 9.00am EU Manufacturing PMI for July previous 54.8
- Thursday 10.00am EU PPI for June previous 2.3%y/y
- Friday 9.00am EU Services PMI for July previous 58.1
The primary highlight last week was the German IFO survey (106.4) which continued the recent theme of poor numbers from Europe’s largest economy. Nevertheless, with most of the focus elsewhere, it had relatively little impact on the market. With the outlook for European interest rates still uncertain, the main highlight this week will be HICP and PPI for signs that inflationary pressures will force the ECB into further action in the months ahead.
Interest rate outlook
| Country |
Current rate |
Last change |
Date of change |
Next meeting |
| UK(MPC) |
5.75% |
+25bps |
05/07/07 |
2nd August |
| US (FED) |
5.25% |
+25bps |
29/06/06 |
7th August |
| EU (ECB) |
4.00% |
+25bps |
06/06/07 |
6th September |