Dovish FOMC Minutes, US Trade Deficit, China Q2 GDP: Economic Events For July 9-13

This week's focus in the U.S. will be on Wednesday, when we receive the trade balance report and the Federal Open Market Committee minutes for its June 19-20 meeting.

The May trade data will help set expectations for second-quarter economic growth while the minutes of the June FOMC meeting will likely show a dovish tone.

The majority of the data in June has surprised consensus to the low side. Out of the 20 June indicators released, so far 14 have come in below expectations. The data to be released over the next several weeks will determine whether Fed officials have enough ammunition to ease further on Aug. 1 or if they will wait until the Sept. 13 meeting.

This is an eventful week in Asia. Focus will be on China's June industrial production and second-quarter gross domestic production growth. Both are due on Friday. Economists expect China's Q2 GDP to fall to 7.6 percent, its worst performance since the 2008 financial crisis.

Events in Japan include the Bank of Japan's monetary policy meeting on July 11-12.

In Europe, the most important event will be the Eurogroup meeting. Investors will be looking for clarity about the Spanish bailout and possibly some details about the government's vision of a banking union. Meanwhile, numerous inflation and industrial production data releases are also on the agenda.

Below are entries on the economic calendar from July 9 to July 13. All listed times are EDT.

Monday

12:00 a.m. -- Chicago Fed President Charles Evans (FOMC non-voter) speaks on A Perspective on the Future of Monetary Policy and the Implications for Asia at the Sasin Bangkok Forum in Thailand.

12:00 a.m. -- Boston Fed President Eric Rosengren (FOMC non-voter) speaks as part of a panel discussion on Financial Crises and the Future of Global and Asian Banking at the Sasin Bangkok Forum's Asia in Transformation conference at the Plaza Athénée Bangkok in Thailand.

11:55 a.m. -- San Francisco Fed President John Williams (FOMC voter) speaks on the outlook to the Oregon, Idaho and Nevada Bankers' annual joint convention in Coeur d'Alene, Idaho.

3:00 p.m. -- Growth in consumer credit continues to be led by increases in student and auto loans, while credit card debit languishes. Consensus expects consumer credit to grow by $8.5 billion in May compared with $6.5 billion in April.

3:30 p.m. -- Treasury auctions 13-week and 26-week bonds.

Non-U.S.:

E17 -- European Central Bank President Mario Draghi speaks on Economic and Monetary Affairs to European Parliament.

E17 -- ECB Executive board member Peter Praet and Portugal Central Bank Governor Carlos Costa speak at a seminar in Lisbon.

E17 -- Eurogroup meeting.

Austria - Central Bank Governor Ewald Nowotny speaks on economic governance conference in Brussels.

Tuesday

6:05 a.m. -- St. Louis Fed President James Bullard (FOMC non-voter) speaks on The Eurozone with Entry and Exit at OMFIF Golden Series Lecture in London.

7:30 a.m. - NFIB Small Business Optimism Index for June.

3:30 p.m. -- Treasury auctions 4-week bonds.

5:00 p.m. -- Treasury auctions 3-year bonds.

Non-U.S.:

France -- President Francois Hollande meets UK Prime Minister David Cameron in London.

France -- Central Bank Governor Christian Noyer presents the Central Bank's annual report at the news conference.

E27 -- The Economic and Financial Affairs Council (ECOFIN) meeting.

Australia -- The Reserve Bank of Australia Deputy Governor Phillip Lowe speaks to Economists' Conference in Melbourne.

China -- Exports and imports for June.

France -- Industrial production for May.

Italy -- Industrial production for May.

UK -- Industrial output and manufacturing output for May.

UK -- Visible trade balance for May.

Denmark -- Consumer price index for June.

Norway -- Consumer price index for June.

Japan -- Index of tertiary industry activity for May.

Japan -- Corporate goods price index for June.

Wednesday

7:00 a.m. -- MBA Mortgage Index for the week ending July 7.

8:30 a.m. -- The trade deficit is likely to narrow to $48.5 billion in May from $50.1 billion in April. What happened to the trade deficit in May largely depends on how much of the plunge in oil prices filtered through into the cost of imported oil. Going forward, however, at least some of the narrowing in the deficit will be offset by an easing in export growth triggered by the slowdown in overseas demand.

10:00 a.m. -- Wholesale inventories probably increased by 0.3 percent in May after advancing by 0.6 percent in April.

10:30 a.m. -- Crude oil inventories for the week ending July 7.

2:00 p.m. -- The Federal Open Market Committee releases minutes from its June 19-20 meeting. Economists expect the minutes to have a generally dovish tone, albeit with a wide range of opinions expressed. The markets will be scouring the minutes for signs that the recently announced extension to the Operation Twist program is just another step along a path leading to a third round of quantitative easing, or QE3. The minutes will almost certainly state that any additional action would depend on the evolution of the incoming data. In that sense, the plunge in the ISM manufacturing index in June and the paltry 80,000 gain in nonfarm payrolls in the same month have definitely increased the chances of QE3. That said, whether QE3 is a done deal will depend on the second-quarter gross domestic product (GDP) report and July's ISM index. Both will be released just days ahead of the Fed's next policy meeting, which concludes on Aug. 1.

5:00 p.m. -- Treasury auctions 10-year bonds.

Non-U.S.:

Brazil -- Selic overnight rate for July.

Spain -- Prime Minister Mariano Rajoy speaks on bailout/government policy in Parliament

China -- Foreign reserves, new loans and M2 growth for June.

Germany -- Final HICP for June.

Thursday

8:30 a.m. -- Initial jobless claims are expected to edge up to 375,000 for the week ending July 7 after dropping to 374,000 in the prior week. Economists expect jobless claims to be biased higher this week due to the severe weather in the Southeast that knocked out power for millions of people, which will likely keep many from working.

8:30 a.m. -- Economists expect import prices to decline sharply again in June, plummeting 1.7 percent after a 1 percent monthly drop in May, as petroleum prices continued to drop. Export prices likely fell by 0.3 percent in June, following a 0.4 percent decline in May.

2:00 p.m. -- The June Treasury statement should show a deficit of $75.8 billion, which would bring the federal deficit to $919.8 billion for the first nine months of the fiscal year.

3:40 p.m. -- San Francisco Fed President John Williams (FOMC voter) speaks to community leaders at the Governor Hotel in Portland, Ore.

5:00 p.m. -- Treasury auctions 30-year bonds.

Non-U.S.:

E17 -- ECB publishes monthly bulletin for July.

E17 -- ECB President Draghi speaks at a seminar with Mediterranean Countries' Central Banks in Casablanca, Morrocco.

E17 -- Industrial production for May.

Japan -- Bank of Japan target rate for July.

Chile -- Overnight rate target for July.

India -- Industrial production for May.

France -- HICP and CPI for June.

Sweden -- CPI for June.

Ireland -- First-quarter GDP and June HICP.

Friday

8:30 a.m. -- Producer prices are likely to decline 0.5 percent in June after a 1 percent decline in May -- the third consecutive monthly decline. The continuing plunge in energy prices accounts for most of the headline drop. The last time the headline PPI contracted for three straight months was during the same period in 2010, also on the back of softer energy prices. Stripping out food and energy, core producer prices should rise 0.2 percent, again for the third consecutive month.

9:55 a.m. -- Economists look for the University of Michigan Consumer Sentiment Index to tick up to 73.5 for July, from a June print of 73.2.

1:20 p.m. -- Atlanta Fed President Dennis Lockhart (FOMC voter) speaks on regional and Mississippi economy to the Mississippi Economic Council.

Non-U.S.:

Russia -- Overnight deposit rate and repo rate for July.

China -- Industrial production for June.

China -- Fixed asset investments, year to date.

China -- Q2 GDP.

China -- Retail sales for June.

Finland -- June HICP.

Spain -- Final CPI for June.

Italy -- Final HICP and CPI for June.

Poland -- June CPI.