Docket quiet until Inflation Tuesday
Last week ended with stronger than expected US Retail Sales figures for the month of April. Sales rose up to 1.3% which is the highest number seen for 13 months, resulting from a rebound in Auto sales. As April’s employment report indicated, household income figures are rising and savings per household are slightly up, which has led consumers to feel more confident. The University of Michigan’s Consumer Sentiment was also posted above expectations at a reading of 95.8, against a forecast 89.9 and is the best reading since June 2013.
This week starts with no high tier data releases. However, this weekend saw China, the world’s second largest economy, release further disappointing figures for their Industrial Production gauge. The yearly figure climbed to 6% in April from a year earlier with market census around 6.5%. Also Retail Sales rose to 10.1%, below the forecast 10.6%, which added to doubts on whether China’s economy is stabilizing. After March saw a bounce back in data, markets assumed that the Chinese economy had begun to stabilize. However these latest readings have now raised concerns for the markets and dashed hopes that China’s economy has turned a corner.
Inflation figures will be focused on with the UK releasing their yearly CPI figure in the morning, followed by the US posting their monthly figure in the afternoon. Firstly, the UK’s CPI figure which currently sits at 0.5% well below the BoE’s target of 2% is not expected to change but remain at 0.5%. Last week, Governor Mark Carney stated that they do not expect to reach their 2% anytime soon, this has cooled any expectations of a rate rise for the UK in the near future. From the US, the monthly CPI figure is forecast to increase from 0.1% to 0.4%, if seen this could support the Greenback.
- UK CPI y/y
- US CPI m/m
- US Industrial Production m/m
Employment data from the UK is released in the morning, which is expected to remain at 5.1%. The number of people claiming unemployment will be watched to see if the number does increase by 4.1k as forecast. Also, Average Earnings will be heavily watched by the markets as a barometer for when to raise rates. The earnings figure three months after April, are expected to drop slightly to 1.7% from 1.8%. The Eurozone will release their inflation figure shortly after the UK posts their inflation figure, with the single currency zone expected to remain in deflation territory at -0.2%. Lastly, in the evening the Fed minutes will hit the wires, and all will look to decipher whether the Fed members are still looking to raise rates this year.
- UK Average Earnings
- UK Claimant Count Change
- UK Unemployment Rate
- Euro CPI y/y
- US Fed Minutes
A quieter day as we come to the end of the week. The only major release will come from the UK, as the monthly Retail Sales gauge is posted. Retail sales are expected to rebound in April to 0.7% from March’s disappointing -1.3%. In the afternoon, the US will release both the weekly unemployment claims figure and the Philly Fed Manufacturing Index, with a positive reading expected for April.
- UK Retail Sales m/m
- US Unemployment Claims
- US Philly Fed Manufacturing Index
The week closes in the same way it began, with no high tier data releases. The UK will see the CBI Industrial order expectations released, with the figure forecast to fall further from -11 to a -13. In the afternoon the markets get an insight into the US housing market as they release their Existing Home Sales figures.
- UK CBI Industrial Order Expecations
- US Existing Home Sales