Week Ahead – July 17th

Next week, investors will focus on the earnings results from major US companies, such as Bank of America, Morgan Stanley, Goldman Sachs, IBM, Netflix, Tesla, and Johnson & Johnson. Additionally, it will be interesting to monitor retail sales, industrial production, and housing data, including existing home sales, housing starts, and building permits. In other news, China is set to release Q2 GDP growth, retail sales, industrial production, and fixed asset investments. Markets will also be attentive to inflation rates in the United Kingdom, Canada, Japan, New Zealand, and South Africa. Furthermore, the central banks of Turkey and South Africa will make decisions regarding monetary policy, Australia will publish the unemployment rate, and the UK and Canada will release retail sales data.

The highlight of the next week will be earnings reports from a range of prominent companies, including Bank of America, Morgan Stanley, Goldman Sachs, IBM, Netflix, Tesla, Johnson & Johnson, Philip Morris International, and American Express. In terms of macro data, United States retail sales is expected to continue to grow at a moderate pace of 0.4% in June. On the other hand, industrial production is projected to contract by 0.1%, marking the second consecutive month of decline. Also, there are expectations of a decline in June’s building permits and housing starts, as well as in existing home sales. Other economic data to watch for include homebuilder sentiment, business inventories, overall capital flows, and regional activity indexes such as the NY Empire State Manufacturing Index and the Philadelphia Fed Manufacturing Index. Beyond the United States, attention will also be focused on Canada, where investors will be keeping a close eye on inflation data, retail trade figures, housing starts, and home prices.

In the United Kingdom, CPI figures are expected to show a decline in annual inflation to 8.2% in June, following an unexpected unchanged rate of 8.7% in the previous month. Meanwhile, the core index is likely to remain at its highest level since March 1992. Additionally, retail sales are projected to continue their upward trend for a third consecutive month, highlighting strong consumption. Furthermore, Gfk Consumer Confidence and public sector net borrowing will be closely monitored by investors.

The economic calendar for the rest of Europe is anticipated to be relatively calm, with final inflation rates taking the spotlight. Preliminary figures suggest another deceleration in consumer prices in the Euro Area, with headline figures reaching a 17-month low of 5.5%. However, the core inflation rate has shown an increase. The flash consumer survey will also be of interest, as confidence is expected to improve slightly, reaching a new high since February 2022. In Germany, producer prices are expected to decline for the eighth time in the last nine months. Additionally, Turkey is expected to deliver another rate hike following a 650 bps increase in the main rate in the previous meeting. In China, all eyes will be on GDP growth data for the second quarter, set to slow considerably and underscore the lack of traction in the country’s recovery since the reopening from pandemic lockdowns.

Markets will also await Chinese industrial production, retail sales, fixed investment, and the unemployment rate for June, while the PBoC is set to hold its key interest rates unchanged. In Japan, a fresh CPI reading will confirm the BoJ’s view that inflation is slowing, while elsewhere, India will release new trade figures. In Australia, minutes from meeting that preceded the RBA’s interest rate hold will give insights on the central bank’s conditions on another rate hike. Investors also await a batch of Aussie labor data for June. In the meantime, New Zealand inflation is expected to slow in the second quarter.