• Weekly briefings
• Archive

UK Data

• Monday 9.30am PPI Input and Output for August previous 0.0%y/y & 2.4%y/y.
• Tuesday 9.30am Trade Balance for July previous -£6.2bn.
• Wednesday 9.30am Average Earnings for August previous 3.4% 3m avg.
• Thursday 12.01am RICS Housing Survey for August previous 12.6 3m % bal.

Overall data from the UK economy continues to remain robust with both the manufacturing side as well as the service component of the economy coming in above expectations. However given the unusual circumstances of the ‘credit crunch’ with banks reluctant to lend to each other, the Bank of England chose to leave interest rates on hold at 5.75% and attempted to relieve the liquidity crisis by offering another £4.4bn to the £17.6bn already available to the banks. For this week housing market data as well as average earnings will be the focus for the market to help evaluate the outlook for interest rates.

US Data

• Monday 8.00pm Consumer Credit for July previous $13.2bn.
• Tuesday 1.30pm Trade Balance for July previous -$58.1bn.
• Friday 1.30pm Retail Sales for August previous 0.3%m/m.
• Friday 1.30pm Import Prices for August previous 1.5%m/m.
• Friday 2.15pm Industrial Production for August previous 0.3%m/m.
• Friday 3.00pm University of Michigan Sentiment Survey for September previous 83.4.

Data from the US last week painted a pretty bleak picture of the state of the US economy with pending home sales falling by a dramatic 12.2% and the employment data in terms of the non farm payrolls showing a drop in jobs created in August of 4k. This is the first time since August 03 that this data has been negative and with the data for June and July being revised lower, the pressure is building for the FOMC to cut interest rates when they meet on the 18th. For this week the market will focus on any data that shows the current state of the consumer to see whether the slowing in the housing market is having an impact on them.

Euro Zone Data

• Wednesday 10.00am EU Industrial Production for July previous -0.1%m/m

Last week the ECB left interest rates on hold at 4.00% and Trichet avoided using his code for higher interest rates by dropping ‘strong vigilance’ and replacing this by ‘monitoring closely’. Given the unusual nervousness in the credit markets, the ECB has avoided raising interest rates; however the risks remain for further tightening still in the months ahead.
There is little data of significance this week; however the market will be wary of any comments from central bankers given the current cautious environment.

Interest rate outlook