Economic Events: Euro Zone GDP, US Inflation, Retail Sales And Housing Starts

The focus in this jam-packed week will be on euro zone second-quarter economic growth, inflation data across Europe and the U.S., U.S. retail sales, Germany and euro area ZEW survey, and U.S. housing data.

Official data preliminary data, which will be released on Wednesday, is expected to show that the euro area grew for the first time since 2011 in the second quarter.

“We expect GDP to have been at least flat quarter-on-quarter and it may well have eked out marginal growth of 0.1 percent quarter-on-quarter,” notes Howard Archer, chief U.K. and European economist at IHS Global Insight.

In the U.K., the Monetary Policy Committee took a bold step with its forward guidance on interest rates last week, although the various “knockouts” left some wondering whether it created more confusion than it cleared up. Vicky Redwood, chief U.K. economist at Capital Economics, said she expects Wednesday’s minutes of the MPC meeting to show that the committee voted unanimously to introduce forward guidance.

Data released Sunday night showed that Japan's economy expanded at a slower pace than most analysts expected in the second quarter. Japan’s GDP grew 0.6 percent in the April to June period, indicating an annualized increase of 2.6 percent. That is down from the 4.1 percent annual rate in the first three months of the year. Analysts were expecting growth of 3.6 percent.

Elsewhere, there are scheduled interest rate meetings this week in Indonesia (Thursday) and Sri Lanka (Friday).

Monday

2 p.m. – The U.S. federal government is expected to have posted a budget deficit of $96 billion in July, which could bring the deficit to $606 billion for the first 10 months of the fiscal year.

Non-U.S.:

Greece – Q2 GDP, preliminary reading.

Japan – June core machinery orders.

Tuesday

7:30 a.m. – NFIB small business optimism for July.

8:30 a.m. – Import prices are poised to rise 0.8 percent in July after four straight months of declines, as imported energy costs jump on the back of a nearly 5 percent rise in Brent crude prices globally. Excluding petroleum, import prices should be flat in July, after declining mostly in May and June. The recent strength of the U.S. dollar should also cap the rise in import prices. Export prices probably rose by 0.2 percent, after declining by 0.1 percent in June.

8:30 a.m. – Retail sales likely advanced by 0.3 percent month-on-month in July, after rising 0.4 percent in June. Excluding autos, gasoline and building materials, economists expect core retail sales to have advanced by 0.3 percent in July.

10 a.m. – Business inventories likely increased by 0.3 percent in June, after advancing 0.1 percent in the prior month.

12:45 p.m. – Federal Reserve Bank of Atlanta President Dennis Lockhart (FOMC non-voter) speaks on the economic outlook before the Kiwanis Club of Atlanta.

Non-U.S.:

Australia -- Pre-election economic and fiscal outlook.

Chile -- Overnight rate target.

Germany – Final July HICP, CPI.

U.K. – July CPI.

U.K. – July input/output prices.

Germany – August ZEW economic expectations index.

E17 – August ZEW economic sentiment index.

E17 – June industrial production.

Wednesday

7 a.m. -- The Mortgage Bankers Association's, or MBA's, mortgage-applications indexes for the week ending Aug. 9.

8:30 a.m. – Economists expect a 0.4 percent month-on-month rise in the Producer Price Index in July, with gains in gasoline and fuel oil prices likely making significant contributions. They have also penciled in a 0.2 percent increase in the core PPI, although the year-over-year rate is likely to decline from June’s 1.7 percent to 1.5 percent, given strong base effects.

Non-U.S.:

U.K. – MPC minutes.

U.K. – June ILO unemployment rate.

France -- Final July HICP, CPI.

E17 -- Preliminary Q2 GDP.

France – Preliminary Q2 GDP.

Germany – Preliminary Q2 GDP.

Cyprus -- Preliminary Q2 GDP.

Thursday

8:30 a.m. – Economists are forecasting a 0.2 percent month-on-month increase in the Consumer Price Index in July. The core CPI probably rose by 0.2 percent as well.

8:30 a.m. – The Empire State index should show a print of 10.0 in August -- an improvement from July’s 9.5.

8:30 a.m. – Initial jobless claims are expected to rise modestly to 335,000 for the week ending Aug. 10. In the prior week, initial jobless claims settled at 333,000.

9:15 a.m. – Economists look for industrial production to increase by 0.3 percent month-on-month in July, matching June’s pace. If the forecast proves correct, that would bring the capacity utilization rate to 78.0 percent, from 77.8 percent. Manufacturing production likely increased by 0.4 percent in July.

10 a.m. – The Philadelphia Fed manufacturing index will probably show a drop to 15.0 in August after a print of 19.8 in July. Despite the decline, such a result would mean that the index stood in positive territory for three consecutive months, something that hasn’t happened since the first half of 2012.

10 a.m. – Economists look for the NAHB index of home builder sentiment to remain steady at 57 in August.

Non-U.S.:

Indonesia -- Bank Indonesia reference rate.

Friday

8:30 a.m. – Housing starts probably jumped by 8.9 percent month-on-month to 910,000 in July. Building permits have continued to post solid numbers and is expected to come in at 935,000 in July.

8:30 a.m. – Productivity (output per hour worked) in the nonfarm business sector likely posted a 0.5 percent increase in the second quarter.

9:55 a.m. – Economists are looking for a reading of 85.5 in the University of Michigan consumer sentiment report for August, little changed from the final July print of 85.1 but above the second-quarter average of 81.7.

Non-U.S.:

E17 – Final July HICP.

E17 – June trade balance.

Taiwan – Q2 GDP.

Sources: Central banks, European Commission, Thomson Reuters, Market News, Capital Economics, Barclays, Bank of America Merrill Lynch, Societe Generale, Nomura.