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UK and US data could determine timing of first rate hike

The main news from last week was the unexpected action of the Peoples Bank of China which devalued the Yuan early Tuesday morning.  After a string of weak economic data and the sharp fall of exports and producer prices sliding to nearly a six year low in July, China’s central bank intervened in the currency market to help reignite growth.  The value of the Yuan fell by as much as 2% against the greenback and fell a further 2% on Wednesday morning as the selloff of China’s currency continued.  This prompted the PBoC to step in on Wednesday evening to dispel fears of any further action to weaken the renminbi, confirming that no further intervention was needed to devalue its currency further.

Monday 17th August 2015

A relatively quiet start with no high tier data being released. Markets will look at the Eurozone’s trade balance figure due for release this morning where it is due to decrease to €19.3bn.  Later this afternoon, the Empire State manufacturing Index gauge is posted from the U.S. with manufacturers in New York expected to report a slight increase from the previous month.

  • Eurozone Trade Balance
  • U.S. Empire State Manufacturing Index

Tuesday 18th August 2015

Consumer Price Index (CPI) from the UK will be the focus come 9.30am. With price inflation currently being flat and expected to remain at 0%, this gauge is one that is being watched by the Bank of England as an indicator into when to raise rates.  The target of the BoE is for this to be at 2% and Mark Carney, the head of the central bank, has outlined that they expect prices to start increasing later this year.

  • UK CPI
  • UK RPI
  • US Building Permits
  • US Housing Starts

Wednesday 19th August 2015

Two high tier releases from the U.S. will be keenly watched as this will give a further insight as to when rates rise. In the afternoon the monthly inflation figure will be posted which is set to fall to 0.2%.  Later in the evening the latest FOMC minutes will be released. The market  will be examining these carefully to decipher what members think about when rates will be increased.  This will likely see further US Dollar volatility, especially if there is a clear signal on a potential rate hike.

  • US CPI
  • FOMC Meeting Minutes

Thursday 20th August 2015

Early morning price action could be dependent on the content of the FOMC minutes. That aside there is still plenty to keep the market occupied in terms of data. UK retail sales are due expected to reverse the -0.2% from last month. Crossing the pond there is a raft of data from the US.

  • UK Retail Sales
  • US Jobless Claims
  • Philly Fed Manufacturing
  • US Existing Home Sales

Friday 21st August 2015

Much of the focus will be on the manufacturing and service sector data from the Eurozone. There will be particular interest in the flash manufacturing from Germany as data from the nation has been fairly mixed. Meanwhile, in the UK the public sector borrowing is set for release, whilst US manufacturing hits the wires in the afternoon.

  • German PMI Services
  • German PMI Manufacturing
  • UK Public Sector Net Borrowing
  • US PMI Manufacturing