TradeTheNews.com September-October
2015 Outlook: Countdown to Liftoff
Wed, 02 Sep 2015 23:56 PM EST
Who says August markets are dull? Over the past few weeks, global markets have
been whipsawed, gripped by the dual fears of a Chinese slowdown and the coming
end of ultra-loose Fed policy. To some extent the wild August action may be a
healthy jolt of reality for markets that had grown complacent. That was
certainly the case for Chinese stock investors who mostly consist of newcomers
to the game and had only seen big gains in equities, but learned a lesson about
risk over the last several weeks.
China's policy makers have tried to ease the blow with more stimulus and
anti-short seller rhetoric, but this year's big double digit gains on the
Shanghai index have now vanished, leaving many Chinese momentum investors
stunned. Other global markets felt the ripples, plunging most global equity
indices into correction, and ending one of the S&P500's longest ever
winning streaks without a 10% pullback. Because of Germany's heavily export
based economy, the China scare pushed the DAX into the dubious distinction of
becoming first major western stock market to enter a bear market in this cycle.
This summer's market hurdles were difficult to navigate and caused some
stumbles, but they landed in our target zone. We won the coin toss on the fate
of the Euro Zone - a Grexit was averted at the eleventh hour. As predicted, low
inflation continued to be a thorn in the side of the global economy and cheap
oil got even cheaper despite some painful cutbacks in the North American shale
industry. China's policy makers rode to the rescue of its stock market, as
expected, though the measures were doled out in a ham handed fashion and have
seen inconclusive results. The countdown clock on Fed rate liftoff remains
obscured: though many at the Fed seem eager to get the rate tightening mission
started, recent market gyrations have given policymakers at mission control
another reason to hold back.
The challenges for the markets could be even greater in the next few months. A
new season of political theater is upon us, with the potential for another US
budget clash and a fresh round of European elections including, alas, yet
another Greek ballot. Questions about China's growth remain a hot topic and officials
in Beijing may need to refuel the stimulus booster rockets again in coming
months. Slowing growth in China and its currency devaluation will keep global
inflation weak. Energy markets will continue to suffer from that weak growth
and inflation outlook and also from ongoing supply and demand imbalances. All
of these issues will factor into the Fed's key decision on rate liftoff.
Entering New Political Orbits
Since securing its third rescue package from European creditors, Greece has
found some calm, though there may be one final stage to achieve the successful
launch of the bailout. In an effort to re-consolidate his power before the
effects of the new bailout reforms are felt, Prime Minister Tsipras resigned
his post and called a snap election (the fourth election in three and a half
years in Greece). The September 20 vote is essentially another referendum and
Tsipras' Syriza party - minus the defectors that voted against the bailout
agreement - holds a narrow lead over the main opposition New Democracy party.
Even if the opposition New Democracy pulls out a victory, it would likely abide
by the terms of the bailout, but any political turnover could interfere with
the important process of getting the IMF involved in the new Greek bailout
arrangement. As German Chancellor Merkel put it, the new Greek deal ends
"uncertainties", though the same sentiment occurred after the first
and second Greek bailouts. It remains to be seen if Athens' woes will reemerge
as a problem in another year or two.
The clamor of the Greek crisis may finally be over, but its echo may be heard
in Spain, where general elections are to be held sometime before Christmas.
Many analysts believe the small compromises on debt relief won by Syriza will
strengthen the hand of other populist protest parties, starting with Podemos in
Spain. Formed in 2014, the upstart Podemos movement, led by political science
professor Pablo Iglesias, has won over many voters who used to support a
fragmented group of leftist parties in Spain. Late last year, polls showed
Podemos running in a dead heat with the ruling conservative party (PP), though
more recently it has slipped behind the PP and the main opposition center-left
PSOE. But there are still a few months until the election and it's clear that Podemos
will be a player in Madrid that might inspire more populist candidates in
Europe's peripheral nations.
As in Greece, another revote is scheduled in neighboring Turkey. Former PM
Erdogan was unable to engineer an outright parliamentary majority in June which
would have allowed his AKP party to implement his plan for greatly enhancing
the power of the office of the President, which Erdogan now holds. These
ambitions contributed to the June ballot arriving at no conclusive winner and
the subsequent failure of coalition talks, prompting a new snap election.
Political uncertainty and a surge in violence have already seeded some economic
instability in Turkey, which could be magnified if the poll on the first day of
November results in another hung parliament.
Brazil is another country where recent economic problems have been compounded
by political uncertainty. The national oil company Petrobras is embroiled in a
corruption scandal in which officials pocketed millions of dollars in kickbacks
from construction firms that were granted bloated contracts. The already
tarnished President Rousseff has been further bruised by her connection to
Petrobras, having been its chairwoman for part of the time that the graft ring
operated. Though there is no evidence she benefited from the bribery scheme,
Rousseff is accused of fudging government accounts to allow for more state
spending ahead of her reelection last year. Pending the findings of an audit
court, she may face an impeachment trial, though that would require a
two-thirds majority vote of Chamber of Deputies (to remove her from office,
another two-thirds vote would be needed in the Senate, which would preside over
the proceedings).
If the impeachment trial is set in motion, the still popular Vice President Temer
would temporarily take over Rousseff's duties. This year hehas led an effort to
mend fences with the business community by taking charge of efforts to defend
the nation's investment grade rating by pushing austerity legislation to reduce
the deficit (as of July S&P revised the outlook on Brazil's BBB- rating to
negative). Interestingly, Mr. Temer, 75, recently gave up his duties as the
President's chief liaison to the legislature, perhaps indicating that he is
unwilling to use his influence in the Congress to lobby for Rousseff. All told,
this could set up a scenario in which the outlook for Brazil takes another hit
if Rousseff is formally accused, but then finds some stability under the
seasoned leadership of Temer.
In the US, the race for President is in full swing with fourteen months to go
before the election. Bloviating candidates and the sense that President Obama
is entering his lame duck phase could embolden the Republican controlled
Congress to threaten another budget impasse this fall. Senate Majority Leader
McConnell has promised it won't happen, but he may not be able to control the
unpredictable House, and a recent Wall Street Journal poll found that
economists feel there is a strong possibility of another budget battle that
shuts down the government and threatens default this year, despite
Congressional leaders' insistence otherwise. Currently the CBO estimates that
the US Treasury will exhaust its borrowing capacity by late November or early
December without a debt limit increase.
The long run up to the Presidential election in 2016 is contrasted by campaign
season in Canada that lasts less than two months, culminating in an election on
October 19. The incumbent Conservative Prime Minister Harper is vying to extend
his nine years of minority government by letting the New Democratic and Liberal
parties continue to split the left-of-center vote. The NDP is the official
opposition party and has built a small lead in the polls over the
Conservatives. The party made inroads in provincial elections earlier this
year, winning control of Alberta and introduced a hike in the corporate tax
rate, per the NDP party platform, and also pledged a review of oil and gas
royalty rates. That could be a preview of a national victory for the NDP, which
could put a further pinch on energy firms that have already been squeezed by
the collapse of oil prices.
PREDICTIONS: Politics can be more harrowing than a rocket ride to the Moon. In
Greece, Tsipras is expected to win the snap election by a narrow margin which should
put the Greek issue to bed, though he may find it more difficult to govern
outside of crisis situations and referendums. Uncertain political situations in
Turkey and Spain will work against European stability at this delicate moment.
In Brazil, President Rousseff may not have 'the right stuff' to govern. A
government collapse under the weight of corruption could further damage the
nation's already weakened economy. That could be compounded if the sovereign
rating gets downgrade to junk, which might cause a disorderly move in the
Brazilian real that would bleed into other emerging market currencies.
A political folly is less likely in Washington this time given the tendency for
a government shutdown to backfire on the GOP, but it won't stop some tough talk
that may be disquieting for markets. Meanwhile, Canada's mercifully short
campaign cycle should benefit the incumbent.
..3, 2, Yuan
China is the new epicenter of market angst. The economic growth rate there has
been slowing for years and the data has been particularly underwhelming this
year. The official government manufacturing PMI just slipped into contraction
for the first time in six months, while the private PMI survey has been in
contraction since March as new orders and exports have seen steepening
declines.
The Chinese stock market didn't pay this much mind until recently. Thanks to
new liberalizations, Chinese investors poured money (often on margin) into
domestic stocks as the new 'hot' investment market, and equity indices launched
like a rocket this spring. But the market failed to reach escape velocity and
came crashing back down to earth, erasing the over 50% year-to-date gain see at
its zenith.
A series of rate cuts in the first half of the year failed to staunch the
bleeding in Chinese equities. Then Beijing announced it would pump billions of
dollars directly into the market and enlisted brokerage houses to do the same,
but with little effect. Finally, the Chinese central bank (PBoC) shocked the
financial world with a sudden devaluation of the yuan, amounting to 5% over
three days.
At this point, Chinese policy looked panicked and policymakers seemed lost. The
knee jerk responses to the stock market bubble deflating took away focus from
the slow, deliberate efforts of the government over the last decade to
institute reforms while still supporting growth. Officials blamed the stock
market burn out on "malicious short sellers" and some tried to pin it
on the Fed's impending rate hike decision. And after spending upwards of $200
billion to prop up the stock market, China abruptly scrubbed its plunge
protection program.
The PBoC currency devaluation was one small step for the yuan but a giant leap
for the global currency regime. The move will certainly help the Chinese
economy by supporting exports, but some economists fret that China's domestic
deflation will be among those exports, even as US and European importers enjoy
lower cost products from China. The weaker yuan will also saddle some Chinese
firms that have large dollar debts with big foreign exchange losses.
The most concerning issue with the devaluation of the yuan is whether it will
embolden other developing economies to join the race to prop up their own
exports, starting a genuine currency war. Already, in the wake of the China
currency move, Vietnam widened its FX trading band from 1% to 3%, effectively
devaluing its currency. Other emerging markets like Turkey and Mexico have seen
their currencies fall too-far too-fast and have increased FX interventions.
So far global policy leaders are playing it cool. The PBoC effectively defanged
potential critics by offering just what has been asked of it - more currency
flexibility (and in the aftermath the IMF agreed it was appropriate, perhaps
helping the case for the yuan gaining status as an international reserve
currency next year). Ahead of a G20 meeting of finance ministers and central
bankers in Turkey (Sept 4-5), reports say that those leading economies will
downplay the notion of competitive devaluation being a major issue.
The subject is bound to come up again when China President Xi Jinping makes his
first state visit to the US in late September (no set date yet). Many
Congressmen condemned the currency move as manipulation, and it may throw a
monkey wrench into the Obama Administration's efforts to seal the trans-Pacific
trade pact. The White House will likely restrain itself to repeating its mantra
that it wants to see more rapid reform efforts in China. The US Treasury's
semi-annual currency report, due out this fall, should echo that sentiment,
though it could also be used as a platform to issue a sterner warning to
nations that are considering their own currency devaluations.
Neighboring Japan, which has hit its own soft patch, expressed some concerns
about China's actions. Japan just reported a drop in Q2 GDP, its first economic
contraction in three quarters, and a setback for the policies of Prime Minister
Abe. The data was blamed on weaker external demand from the US and China,
leading to a significant drop in exports. A senior advisor to Abe made it clear
that Japan can respond if necessary, suggesting the Bank of Japan should
consider extra easing if the Yen rises sharply in reaction to the situation in
China or if Japan's Q3 GDP fails to register growth. For his part, BOJ governor
Kuroda agreed he is prepared to adjust Quantitative and Qualitative Easing
(QQE) if needed, though as of late August the current pace of the program was
sufficient to meet inflation objectives despite the drop in oil prices. He also
indicated that excessive appreciation of the Yen has been corrected.
PREDICTIONS: China's stock market appears to have regained a measure of
stability in recent days, though the country's momentum-seeking investor class
may shy away from equities for a while and move on to another asset class.
Though the market swings have drawn comparisons to the volatility seen around
the collapse of Lehman Brothers or even the 1929 stock market crash, most
economists see limited risk to China's real economy from the stock tumult and
even less for the global economy.
If China's broader economy continues to weaken, things could get more serious
for the global outlook. China trade accounts for only 1% of US GDP but its
closer to 3% of the export-reliant German economy, so more China weakness could
push the euro back toward parity with the dollar. There would obviously be an
even bigger impact on commodity driven markets like Brazil and Australia that
have helped supply China through its boom times.
But despite the recent jitters, officials in Beijing remain confident in their
GDP targets and there are no clear signs of a consumer malaise. Market watchers
should take some comfort from the fact that, in the worst throes of the August
markets, Apple CEO Tim Cook took the extraordinary measure of announcing that
business in China remained strong in recent weeks. Another solid GDP report for
Q3 (Oct 14) should foster more stability.
Chinese markets will be closed for a holiday on September 3 and 4, which may
offer some welcome relief as it is clear more work needs to be done after the
technical damage done by the stock market convulsions. After the clumsy effort
to directly prop up the stock market, China's leaders will probably return to
more traditional stimulus efforts like rate cuts to keep the economic engine
humming. The unrestrained ease with which the PBoC devalued the yuan does raise
the question of whether this will become a more regular part of its stimulus
toolkit. At the time of the move, some press reports claimed that influential
voices in the government were pushing for a 10% devaluation. Central bankers
quickly denied this report, but did say they would step in when the currency
market is "distorted." Diminishing returns from traditional
accommodation may also lead to renewed speculation about China launching its
own brand of quantitative easing.
Houston, We Have a Problem
The oil patch has suffered amidst the crash landing in the energy market.
Excess production has more than halved the price of oil in the last twelve
months, and dealt crude futures a streak of eight straight weekly losses, the
worst run in three decades. Faced with this reality, oil majors have
universally cut their capital spending budgets, and some oil services firms
have reduced their hefty dividend payments as they batten down the hatches.
Since the swoon started late last year, the US shale industry has
decommissioned over half of its land-based drilling rigs, but that hasn't been
enough to prop up the energy market as OPEC has stubbornly maintained output
levels.
Dramatically lower oil prices are boosting demand. The International Energy
Agency just raised its forecast for 2015 world oil demand growth to 1.6 million
barrels per day (a 200 thousand bpd increase from its prior forecast), highlighting
a "drastic uptick" largely as a result of low prices. But despite
demand growing at the fastest rate in five years, the EIA said the global
supply overhang is likely to persist well into 2016.
Saudi Arabia has been pumping out about 10.5 million bpd all summer, determined
to hold onto market share, even though lower oil revenues have forced the
Kingdom to issue new sovereign debt for the first time in eight years. Energy
market developments are bound to come up when Saudi King Salman visits the US
this month (Sept 4). The official topics of discussion are more political,
including regional security in light of Saudi's skirmish with the Houthis in
Yemen and the Iran nuclear deal. Some press reports have said that Saudi will
look to implement a modest 300 thousand bpd production cut this fall, but based
only on the domestic demand environment - it would not be expected to impact
export levels.
Some non-Gulf OPEC nations have been pleading with the Saudis to agree to some
response to lower oil, and lately there are signs that the pain of low crude
prices may be eroding the Saudi hard line. A recent OPEC statement said the
cartel would be willing to talk with other producers about steps to get
"fair prices," as long as the discussions take place "on a level
playing field." That may open the door for an arrangement between Saudi
Arabia and Russia, who are fiercely contending over the Chinese oil market (and
lately Russia is winning - it surpassed its rival as China's biggest oil
supplier in May).
The broader commodities market hasn't been immune to the forces acting on
energy. An impending Fed rate hike has created some aversion to investments in
dollar denominated commodities. Additionally, the PBoC's decision to devalue
its currency added to the downward pressure on raw material prices already felt
because of China's gradual economic rebalancing toward less commodity intensive
growth.
Cheaper commodities have fed into weak inflation, which has become one of the
biggest concerns of global central bankers today, as they desperately work to
avoid the fate of Japan, which went through a decade of deflation woes. A Fed
paper prepared for the Jackson Hole symposium laid out the risks this way: The
risk of of experiencing deflation in US over the next five years increases from
zero in short term to about 15%, for Japan, risk remains around 50%, and for
the Eurozone, the short-run the risk of deflation is about 5% and it increases
to about 20% over the next five years.
Putting aside Japan, Europe may be the most vulnerable to continued commodity
weakness pushing down inflation. The Eurozone has been troubled by low
inflation for several years and the fear of deflation was enough to inspire the
European Central Bank to launch its QE program in March. Given the market
events in August, there are now some calls for the ECB to do even more.
Analysts at JP Morgan recently wrote that the ECB may consider additional
stimulus to offset economic risks arising from emerging market weakness (the
same report also suggested the BOJ could take a more aggressive tack in early
2016 if negative core inflation readings crop up). Meanwhile, the IMF said in
July that the QE program may need to be extended beyond the presumed end date
of September 2016 and that Eurozone inflation won't reach the target level
through 2020.
PREDICTIONS: Saudi Arabia has been playing a game of chicken with Russia and
with shale oil producers who reacted by getting more efficient. But if crude
prices retest recent lows it may be the Saudis that finally blink, as long as
they are given some opportunity to save face. However, even if a gentlemen's
agreement can be reached amongst producer nations, the massive glut of supply
is not going to vanish overnight.
Crude is the canary in the coal mine: if oil prices can't stabilize, the
broader commodity market and inflation forecasts will be at risk. The last ten
months of lower oil prices have done little to boost global consumer spending,
so the current low price environment may be more indicative of a weak economy
with tepid demand rather than a harbinger of a business cycle about to
blast-off after being refueled by cheap oil. Even during the height of energy
demand this summer oil prices could not gain any traction, so as we move into
the autumn and demand sees a seasonal decline, there is no fundamental basis
for a rebound. The evidence suggests that low inflation will persist for at
least the rest of 2015.
The question is whether the drop in energy prices is due to a global economic
slowdown in the making or if it's completely supply driven. There are some
indications that demand is healthy, and a three-day, 30% snapback rally at the
end of August fostered some hope that petroleum futures were bottoming out. Yet
it remains to be seen if the lows will be retested, and some energy analysts
still foresee WTI crude trading below $30/barrel.
Analysts will have their radar trained on the ECB policy reaction to the
threats from weak commodities and the resultant problems in emerging market
economies. The ECB is only about a third of the way through pumping more than
$1 trillion into the Eurozone economy, but if the flirtation with deflation
persists, central bank officials will begin to aggressively jawbone the issue.
In the nearer term, weak oil and a slowing China economy, along with a recent
rebound in the euro from safe-haven flows could prompt the ECB to revise down
its inflation outlook at its next policy meeting (Sept 3). At this point, the
notion of more ECB stimulus is a moonshot - not likely to pan out, but a very
dramatic moment if it does occur.
Ladies and Gentlemen, We Have Liftoff
The Fed decision in September could be fraught, a damned-if-you-do
damned-if-you-don't situation. Liftoff this month could have the markets seeing
stars, vexed by the prospect of rates running higher out of step with other
global central banks that are still at full throttle on stimulus. On the other
hand, if the Fed decides to abort in September it could indicate that the
central bank has some indications of economic deterioration that could be
bearish.
The August jobs report (Sept 4) is seen as a low hurdle for rate liftoff - only
a terrible disappointment would contribute to a no go decision. If the non-farm
payrolls come in well above expectations it could help justify rate liftoff
this month. However, August is known for producing anomalous jobs data and has
missed NFP forecasts for each of the last four years, sometimes by a wide
margin.
There are other factors that the Fed will be considering besides the data as it
computes the optimal timing for liftoff. At the Jackson Hole symposium a number
of FOMC members acknowledged that the recent market turmoil could factor into
the decision making process. Fed Vice-Chairman Stanley Fischer encapsulated the
sentiment by saying that financial market developments are a concern, though
the turmoil could dissipate quickly, and that the committee has two more weeks
of data to consider before deciding. To many analysts, Fischer's comments
indicated that while rate liftoff is not a sure thing in September, it's
probably unrealistic to think that the Fed will push back the first rate hike
to next year.
The sudden, steep stock market correction last month, which culminated in a
mini 'flash crash' on August 24, may have shaken the confidence of retail
investors, but there are still many reasons the Fed could still see a green
light for September rate liftoff. Growth data has been solid, most notably the
Q2 GDP revision that brought growth in the quarter up to 3.7%, five-tenths
higher than expected, on improved consumer and business spending. The labor
market has continued to recuperate and consumer confidence readings have been
solid. Additionally, many commercial banks, which would benefit from higher
interest rates, are lobbying the Fed to get on with it. The Fed may also not
want to chance waiting until mid-December when conditions are more illiquid.
The arguments against a move this month start with the concern that even if the
US economy can withstand slightly higher rates, the global economy won't be
able to handle the g-forces of liftoff (and will end up puking lower). As
steward of the emerging markets, the IMF has been warning about this outcome
all year. Now some prominent economists, including two at Barclays, have begun
to agree that the Fed should wait until 2016. Other voices argue that the Fed
"missed the launch window" earlier this year and that recent market
volatility makes now too precarious a time for a rate hike.
For the Fed itself, weak inflation is the biggest sticking point. The core PCE
price index has edged up only 0.1% month over month for each of the last six
months, and in July the year over year figure slipped a tenth to 1.2%. July
core CPI undershot expectations, and to cap it off the Q2 employment cost index
rose only 0.2%, four-tenths less than forecast and its smallest rise in three
decades.
The start of a rate tightening cycle is difficult for businesses: data compiled
by Goldman Sachs indicates that in the quarter after the last dozen tightening
regimes began, price to earnings ratios contracted an average of 7.2%. S&P
analysts have noted that during the six months before or after the first rate
hike, the S&P500 index experienced a decline of 5% or more about 80% of the
time (in 13 out of 18 cycles since WWII).
That could spell trouble for companies that are already struggling with slow
growth, but there are a number of factors that makes this cycle unique. This
time around, the Fed is under no pressure to curb unsustainable growth or
surging inflation, so it will likely be able to take it very slow. Also, the
starting point from the zero bound is unprecedented and bond yields are much
lower than in past rate tightening cycles. In the last half dozen cycles the
average starting point for the fed funds rate has been around 5% and the
10-year treasury close to 7%. That would support the thesis that this time
rising rates will not be enough to wreck the current bull market in stocks, and
bond yields will rise gradually with Fed rates and improving growth trends.
If the Fed decides against liftoff in September, a key signal will come from
Richmond Fed President Lacker, seen as the leading hawk on the current FOMC but
who has thus far voted with the majority to refrain from rate action. In early
September, Mr. Lacker plans to give a speech entitled "The Case Against
Further Delay", making it abundantly clear that if the Fed stays its hand
in September he will register the first dissent of the year, exerting pressure
on his colleagues for an October or December move.
PREDICTIONS: The start of a new rate cycle is always the trickiest part,
finding the right moment between moving too early and waiting too long. The Fed
might be experiencing something akin to the dread astronauts must feel while
sitting on the launch pad just before takeoff - confident in their objective
but worried about the perilous means of reaching it. A false step at this point
could blow up the Fed's credibility.
Though the Fed's first hike in nine years may be challenging for some markets,
the underlying reasons for tightening are bullish - a better economy that the
Fed believes can handle less accommodation. Some analysts theorize that the Fed
may simply want to create some room to maneuver in case negative macro events
required some renewed stimulus from the central bank. A couple of 25 basis
point hikes this year would give the Fed the ability to cut rates again if
things sour in China or elsewhere. So the bar may be very low for rate liftoff,
and the Fed's emphasis on the rate path after liftoff may be the proper focus.
If they do act in September, the FOMC could ease the blow by ratcheting back
longer run rate projections as they continue to emphasize the new tightening
cycle will be very gradual and peak at a lower than usual altitude. And if the
bond market doesn't explode on the launch pad, it could dispel a substantial
amount of the anxiety regarding mildly tighter Fed policy.
Chances are, however, that by mid-September the FOMC majority will still see
conditions as unsatisfactory, and will rely on the caveat of strict "data
dependence" to abort rate liftoff. Despite a hawkish slant out of Jackson
Hole, fed fund futures haven't gotten back above a 1-in-3 chance of a rate rise
this month, meaning a hike now would be a "surprise." Historically
September and October are two of the toughest months for stock markets, which
might be enough to dissuade the Fed from acting at the next meeting if that
pattern holds true. Given the gravity of the decision and with the Fed's
credibility at stake, Yellen and her crew will probably wait to see if the
skies are sunnier in October or December. They will leave the launch window
open for liftoff later this year, but developments in China could further
retard the trajectory of any subsequent rate hikes.
CALENDAR (based on ET)
SEPTEMBER
(US Treasury Currency Report, no set date)
1: Euro Zone Unemployment; US ISM Manufacturing PMI
2: US Factory Orders
3: UK Services PMI; ECB Policy Decision and Press Conf; US Trade Balance; US
ISM Non-Manufacturing PMI; China markets closed for holiday Sept 3-4
4: German Factory Orders; US Payrolls and Unemployment; G20 Finance Ministers
and Central Bank Officials meet in Ankara, Turkey (2-day meeting)
7: Japan Final Q2 GDP
8: China Trade Balance (tentative)
9: UK Manufacturing Production; US JOLTS Jobs Openings; China CPI & PPI
10: BOE Policy Decision
11: US PPI; US Preliminary University of Michigan Confidence
13: China Industrial Production
14: BOJ Policy Statement (tentative)
15: German ZEW Economic Sentiment; UK Inflation Hearings; US Retail Sales; US
Industrial Production
16: UK CPI & PPI; Euro Zone Final CPI; US CPI
17: US Housing Starts & Building Permits; US Philly Fed Manufacturing
Index; FOMC Policy Decision, Updated Forecast & Press Conference; BOJ
Minutes
18: UK Retail Sales
20: Greece snap election
21: US Existing Home Sales; China Caixin Flash Manufacturing PMI
22: Various EU Flash PMI readings
23: German Ifo Business Climate
24: US Durable Goods Orders; US New Home Sales; Tokyo Core CPI
25: US Final Q2 GDP
28: US Personal Income & Spending; US Core PCE; Japan Household Spending
29: US Consumer Confidence
30: UK Final Q2 GDP; Euro Zone Flash CPI; Euro Zone Unemployment; US Chicago
PMI; China Manufacturing and Non-Manufacturing PMIs