UK Data
- Monday 9.30am CIPS Manufacturing PMI for August previous 55.7% bal
- Wednesday 9.30am CIPS Services PMI for August previous 57.0
- Thursday 9.30am Industrial Production for July previous 0.1%m/m
- Thursday 9.30am Manufacturing Production for July previous 0.2%m/m
- Thursday 12.00pm BoE MPC Interest Rate Announcement
Last week’s data calendar was once again dominated by housing data where we saw further signs that recent rate hikes from the Bank of England are beginning to bite. The Nationwide house price survey (+9.6%y/y) was slightly better than expectations although still recorded a five month low. Mortgage approvals rose slightly to 115k from 114k in June however the overall trend here still points lower. The CBI distributive trades survey continued the theme of slowing consumer spending highlighting that retail sales slowed in August. Consequently, the main event this week will be the Bank of England interest rate decision where the committee are widely expected to leave interest rates unchanged at 5.75%.
US Data
- Tuesday 3.00pm ISM Manufacturing Survey for August previous 53.8
- Wednesday 3.00pm Pending Home Sales for July previous 5.0%m/m
- Wednesday 7.00pm Fed Release Beige Book
- Thursday 3.00pm ISM Non Manufacturing Survey for August previous 55.8
- Friday 1.30pm Non Farm Payrolls for August previous 92.0
- Friday 1.30pm Unemployment Report for August previous 4.6%
With the market still heavily focused on stories of a credit crisis, last week’s data had relatively little impact on the FX markets. The main highlight was the release of the Fed minutes from their meeting earlier in the month however due to the fact that the meeting was held before concerns began to unfold, they proved inconclusive in determining the Fed’s path for the months ahead. Of greater interest was Bernanke’s speech on Friday where he stated that the committee will act to as needed to limit the impact of financial turmoil on the economy however will not bail out investors who have made poor decisions. This week, the main highlight on the data calendar will be the employment report on Friday however, this too may be overshadowed if the credit markets continue to take centre stage.
Euro Zone Data
- Monday 9.00am EU Manufacturing PMI for August previous 54.2
- Tuesday 10.00am EU PPI for July previous 2.3%y/y
- Tuesday 10.00am EU Retail Sales for July previous 0.9%y/y
- Tuesday 10.00am EU GDP for Q2 previous 2.5%y/y
- Wednesday 9.00am EU Services PMI for August previous 53.9
- Thursday 12.45pm ECB Interest Rate Announcement followed by press conference at 1.30pm
Despite a plethora of data from Europe last week, numbers failed to deviate too far from the consensus forecast thus keeping the Euro in tight ranges against both Sterling and the Dollar. One positive note was EU Retail PMI (51.0) which showed expansion once again after a poor reading in July. This week, the main data highlights will be retail sales and GDP numbers on Tuesday however both are likely to be overshadowed by the ECB Interest Rate Announcement on Thursday. The outcome is still uncertain with speculation of a rate hike following Trichet’s hawkish tone last month, however given the current situation in the credit markets, the committee may well decide to postpone the hike.
Interest rate outlook
| Country |
Current rate |
Last change |
Date of change |
Next meeting |
| UK(MPC) |
5.75% |
+25bps |
05/07/07 |
6th September |
| US (FED) |
5.25% |
+25bps |
29/06/06 |
18th September |
| EU (ECB) |
4.00% |
+25bps |
06/06/07 |
6th September |