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UK Data
 

• Monday 9.30am Industrial Production for June previous 0.6%m/m
• Monday 9.30am Manufacturing Production for June previous 0.4%m/m
• Tuesday 12.01am BRC Retail Sales monitor for July previous 5.1%y/y
• Wednesday 10.30am BoE release quarterly inflation report
• Thursday 9.30am Trade Balance for June previous -£6.3m

Last week saw another strong set of data releases from the UK with net consumer credit (£0.874bn) mortgage approvals (114k) CBI Distributive Trades (+18) and Manufacturing PMI (54.7) all exceeding expectations. The main event of the week however, was the Bank of England interest rate decision where the committee conformed to expectations and left interest rates unchanged at 5.75%. With the timing of the next interest rate rise from the MPC still uncertain the market will pay close attention to the quarterly inflation report (due out on Wednesday) for any insight that it may give. 

US Data

• Tuesday 7.15pm FOMC Interest rate announcement
• Tuesday 8.00pm Consumer Credit for July previous $12.9bn
• Friday 1.30pm Import Prices for July previous 1.0%m/m

The main highlight last week was the employment report where the headline Non Farm Payrolls showed a disappointing 92,000 new jobs created outside the agricultural sector (the market had been expecting 127,000). As a result, the unemployment rate ticked up slightly to 4.6% from 4.5% previously. Further downward pressure was placed on the Dollar by the ISM Manufacturing (53.8) and Non Manufacturing (59.0) surveys, both of which failed to meet the consensus forecast. This week, the main event will be the FOMC interest rate decision where we expect rates to remain on hold at 5.25%. The accompanying statement is likely to be of greater interest for any indication on the committee’s perception of the US economy and an understanding of their thoughts surrounding monetary policy in the months ahead.

Euro Data

Last week’s data calendar threw up few surprises with most data releases falling roughly in line with expectations. The most significant number was EU HICP (1.8%y/y) highlighting that inflationary pressures appear to be easing slightly in the wake of higher interest rates. Nevertheless, the press release that was the product of the ECB Governing Council meeting, saw the return of Trichet’s code words ‘strong vigilance’ [against inflation] that would indicate a high probability of a rate hike in September. There are no significant data releases from the Euro Zone this week, so the market will focus on external influences for directional bias.

Interest rate outlook