Week Ahead

Minutes from the Federal Reserve, ECB, RBA and RBI will be in the spotlight next week, while central banks in China, Indonesia, the Philippines and Turkey will be deciding on monetary policy.

On the economic data front, flash PMI surveys for the US, UK, Eurozone, Japan and Australia will provide an insight into whether these economies continued to recover amid a resurgence in COVID-19 infections. Other key data to follow include: US housing data; UK retail trade and inflation; Eurozone consumer confidence; Japan Q2 GDP, trade balance and inflation.

In the US, the FOMC minutes will be keenly watched in the coming week amid hopes that they might provide some clarity on policymakers’ next move. In July, the Federal Reserve pledged to use its full range of tools to support the US economy, saying the ongoing public health crisis poses considerable risks to the economic outlook over the medium term.

The Markit PMI survey for the US is set to highlight the long path to recovery from the coronavirus crisis, with forecasts suggesting the private sector activity grew only slightly amid a resurgence in COVID-19 cases. Other notable publications include housing starts and building permits, existing home sales, NY Empire State Manufacturing Index, NAHB Housing Market Index, Philadelphia Fed Manufacturing Index, and overall net capital flows.

Elsewhere in America, key economic data to follow include Canada retail trade, inflation and new housing prices, Mexico retail sales, and Chile and Peru second-quarter GDP figures.

In the UK, flash Markit PMI numbers are expected to show further signs of a turnaround in private sector activity during August, with manufacturing production seen rising the most since March 2019 and the service sector output expanding the most for five years. At the same time, figures from the ONS will most likely signal a slowdown in retail trade growth in July. Investors will also keep an eye on inflation data, Gfk Consumer Confidence, public sector net borrowing and the CBI’s gauge for factory orders.

Elsewhere in Europe, the ECB will publish the account of July’s policy meeting, while flash Markit PMIs for the Eurozone, Germany and France will be in the spotlight. The bloc’s manufacturing sector is set to expand at a faster pace and the service sector growth to slow from July’s two-year high. Other key economic data include: the Euro Area flash consumer morale and current account; Germany producer prices; Spain foreign trade; the Netherlands and Sweden unemployment rates; Switzerland trade balance and second-quarter industrial output; and Turkey consumer confidence. Central banks in Norway and Turkey will be deciding on monetary policy.

The People’s Bank of China will provide an update on its new loan prime rate (LPR) on Thursday, which was left unchanged at 3.85 percent on July 20th as the economy continues to recover from the shock caused by the coronavirus crisis. Meanwhile in Japan, preliminary GDP figures will probably show the economy shrank at a record pace in the second quarter amid lockdowns and business closures due to the pandemic, while the Jibun Bank will be releasing its flash PMIs for August. Other key data include inflation data, trade balance, machinery orders and the final reading of industrial production.

The Reserve Bank of Australia and the Reserve Bank of India will publish their monetary policy meeting minutes. Investors in Australia will also turn their attention to flash PMIs from the Commonwealth Bank amid the implementation of new COVID-19 restrictions in the state of Victoria.

Other highlights for the Asia-Pacific region include: Thailand second-quarter GDP data; Indonesia trade; Singapore non-oil exports; Hong Kong unemployment rate; Taiwan export orders; Malaysia inflation; and New Zealand Services NZ PSI and second-quarter producer prices. Central banks in Indonesia and the Philippines will be deciding on interest rates.