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The week ahead: 11-15 August

A look ahead to the major events, economic releases and company news expected next week.

Ladbrokes shop
Source: Bloomberg

After a week of heavy losses for equity indices, investors will be wondering what is coming next. The upcoming week is not particularly busy, but further German data is expected to show ongoing weakness in the Teutonic powerhouse of the EU. Japanese growth is also expected to slow markedly, boosting speculation that the Bank of Japan will be forced into more easing later in the year.

For the pound, the Bank of England’s inflation report will be useful for gauging when interest rate hikes might arrive, since a higher expectation of inflation from the policy wonks at Threadneedle Street would boost forecasts of an earlier rate hike. UK unemployment data is expected to continue to have an optimistic bent to it, falling once again according to the International Labour Organisation’s definition.

Major US earnings are thin on the ground, with most of the ones of earth-moving importance already having been released. In the UK, Balfour Beatty’s results for the first-half will be interesting for the comment they may offer on the breakdown of negotiations with rival Carillion.

Economic reports

Tuesday

German ZEW survey (August), 10am: One of the more important datapoints this week, the survey of business expectations is expected to fall to 17, having hit 27.1 in July. This was the seventh consecutive fall, and another drop would underline the continuing weakness in the German economy. Market to watch:  DAX, EUR/USD, EUR/GBP

Wednesday

Japan GDP (Q2, preliminary), 12.50am: From growth of 1.6% in the previous quarter, Japanese growth is forecast to slow to -1.8% quarter-on-quarter, the first negative growth since 2012. Market to watch: Nikkei 225, USD/JPY

German CPI (July, final), 7am: The final revision for July is expected to hold steady at 0.3% month-on-month and 0.8% year-on-year. Market to watch: DAX, EUR/USD, EUR/GBP

UK unemployment (June & July), 9.30am: The claimant count rate is expected to drop by 30K in July, from a 36.3K drop a month earlier. Meanwhile, the three-month ILO rate is expected to fall to 6.4% for June from 6.5%. Market to watch: FTSE 100 and FTSE 250, GBP/USD, EUR/GBP

Bank of England inflation report, 10.30am: This semi-annual report consists of BoE projections for inflation in the UK, including the infamous ‘fan charts’ that provide a range of outcomes. However, the real usefulness of the press conference and report will derive from any clues about the possible timing and intensity of rate increases. Market to watch: FTSE 100 & FTSE 250, GBP/USD, EUR/GBP

US retail sales (July), 1.30pm: Having risen by 0.2% in June, retail sales are forecast to rise by 0.3%. Market to watch: Dow Jones, S&P 500, Russell 2000, NASDAQ 100, GBP/USD, EUR/USD, USD/JPY, AUD/USD

Thursday

French & German GDP (Q2, preliminary), 6.30am, 7am: YoY growth in the French economy is forecast to slow to 0.3% from 0.7% in the second quarter, while in Germany it is expected to slump to 1.2% from 2.5% YoY. Market to watch: CAC40, DAX, EStoxx 50, EUR/USD, EUR/GBP

Eurozone CPI (July, final) 10am: No change is expected to eurozone CPI for the month, holding at 0.4% for the month. Market to watch: EUR/USD, EUR/GBP

US initial jobless claims, 1.30pm: Having dropped back below the 300K mark for the week ending 1 August, the figure is expected to rise slightly, to 290K. Market to watch: Dow Jones, S&P 500, Russell 2000, NASDAQ 100, GBP/USD, EUR/USD, USD/JPY, AUD/USD

Friday

UK GDP (Q2, second estimate): No revision is expected to the GDP estimate for the UK, remaining at 0.8% QoQ and 3.1% YoY. Market to watch: GBP/USD, EUR/GBP

US Empire manufacturing index (Aug), 1.30pm: This index has been steadily on the rise of late, mirroring the improvement in the US economy. However, it is forecast to slow to 20 in August, from a July reading of 25.6. Market to watch: Dow Jones, S&P 500, Russell 2000, NASDAQ 100, GBP/USD, EUR/USD, USD/JPY, AUD/USD

US Michigan confidence index (Aug, preliminary), 2.55pm: The first reading for August is forecast to rise to 82.5, from July’s final 81.8 print.  Market watch: Dow Jones, S&P 500, Russell 2000, NASDAQ 100, GBP/USD, EUR/USD, USD/JPY, AUD/USD

 

Company announcements

Monday Balfour Beatty

Tuesday

Ladbrokes, Just Eat, PrudentialSerco

Wednesday

Admiral, Michael Page, Brit, G4S, Cisco

Thursday

CentaminCineworld, Rank, Wal-Mart, JC Penney

 

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