With the Greek bailout deal out of the way for the time being, markets will once again be focusing on data, with PMI numbers likely to dominate at the end of the week.
The Eurozone will see the Markit PMI numbers for July released on Friday. Flash manufacturing PMI is expected to stay unchanged at 52.5, while flash services PMI is estimated to have worsened slightly from 54.4 to 54.2. Overall sentiment across the Eurozone appears to be holding despite the escalation of the Greek debt crisis as the composite PMI is forecast to stay unchanged in July. Separate figures for the Eurozone’s two largest economies are also out. French manufacturing activity is expected to improve in July but services should slow slightly. In Germany, manufacturing activity is forecast to remain unchanged but services should see a small improvement.
It will be a quieter week for the US but housing data could move the dollar as it’s been one of the better performing sectors of the US economy. Existing home sales data is due on Wednesday, which is expected to show a reading of 5.4 million in June versus 5.35 million in May. New home sales could disappoint though which is expected to show a month-on-month decline of 1.1% in June. Manufacturing PMI out on Thursday will also be one to watch as manufacturing has been underperforming since the start of the year. The July flash reading is estimated to improve slightly to 53.7.
The UK will see retail sales data out on Thursday and is expected to confirm the strengthening consumer spending trend. Retail sales are forecast to grow by 4.7% annually in June, up from 4.6% the prior month. Before that, UK government borrowing figures are due on Tuesday and the Bank of England will release the minutes of its June monetary policy meeting on Wednesday. The minutes are not expected to contain any surprises as it predates the BoE Governor Mark Carney’s recent outlook on the UK rate expectations.
The Bank of Japan will also publish its monetary policy meeting minutes on Tuesday, though it’s unlikely it will contain any clues on further policy easing despite the BoJ lowering growth and inflation forecasts for 2015. June trade balance figures for Japan on Thursday and the Markit/JMMA manufacturing PMI for July on Friday could give some insight on whether Japanese exporters are continuing to benefit from a weak yen.
The kiwi is expected to come under further pressure next week as the Reserve Bank of New Zealand will meet on Thursday to decide on rates. It is widely believed the RBNZ will cut its cash rate by a quarter point for the second month in a row to 3.00% as the New Zealand economy has been hit by falling commodity and dairy prices. Also out for New Zealand are trade balance figures on Friday.
The aussie isn’t set to miss out on attention either as the Reserve Bank of Australia will publish its latest meeting minutes on Tuesday and this could indicate whether RBA is considering further rate cuts. RBA Governor Glenn Stevens may provide further clues at a speech on Wednesday and inflation data due the same will also be watched closely. Annual CPI is estimated to have quickened to 1.7% in the second quarter from 1.3% previously.
Finally, also of interest will be Markit’s flash manufacturing PMI for China on Friday and retail sales figures for Canada on Thursday.
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