Thursday, September 3, 2015 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)

(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