The focus will be on the US, UK and Eurozone this week, with the UK kicking off proceedings tomorrow with the expected announcement of the new prime minister. In the US, there are two data releases of note: June durable goods orders on Thursday and the first estimate of Q2 GDP on Friday. Finally in the Eurozone, the ECB holds its policy meeting on Thursday, with some speculation that President Draghi will more clearly signal the central bank’s intent to ease monetary policy. On the data front, the release of July figures for the German IFO business climate index (Wednesday) and preliminary Eurozone composite PMI (Thursday) will be closely watched.
Monday 22nd July
United Kingdom: Voting by Conservative Party members to elect party leader and Prime Minister to end at 17:00 London time. Result expected to be announced on 23rd July.
Australia: Reserve Bank of Australia Assistant Governor Kent to speak
Tuesday 23rd July
United Kingdom: Conservative Party leader and Prime Minister to be announced. Boris Johnson has been the clear front-runner from day one, with opinion polls giving Foreign Secretary Jeremy Hunt only a remote chance. Chancellor of the Exchequer Phillip Hammond has threatened to resign from the cabinet in the event of Boris Johnson becoming prime minister.
United Kingdom: Bank of England MPC member Haldane to speak. Haldane is one the more hawkish members of the Monetary Policy Council but is unlikely to sway market expectations that the Bank of England is more likely to cut than hike its policy rate.
United States: Existing home sales (June).
New Zealand: Trade balance (June). This is a highly seasonal data series and historically the month of June has recorded a small trade surplus. Indeed the consensus forecast is for a surplus of NZD 100mn.
Wednesday 24th July
Eurozone: Composite PMI (July, preliminary data). One of the first indicators of how the Eurozone economy fared in early Q2. The composite Purchasing Managers Index – which estimates economic activity in the manufacturing and service sectors – rose in May and again in June to 52.1, its strongest level since November, but analysts expect it to have stabilised in July.
United States: New home sales (June)
Thursday 25th July
Eurozone: German IFO business climate index (July). This gage of economic sentiment in the Eurozone’s largest economy has been on a clear downtrend since August when it hit 103.8 and analysts forecast a further fall in July to 97.1 from 97.4 in June.
Eurozone: European Central Bank Policy meeting & press conference. The consensus forecast is that the ECB will keep its policy rates unchanged but that it could signal a clearer intent to ease monetary policy going forward. Outgoing ECB President Draghi will then preside over two more policy meetings before stepping down on 31st October and being replaced by Christine Lagarde.
United States: Durable goods orders (June). This proxy for domestic investment is volatile from one month to the next, with markets typically focusing on the measure of non-defense capital goods excluding aircrafts which rose 0.4% mom in May.
United States: Goods trade balance (June, preliminary data). The US trade deficit (seasonally-adjusted) widened to $76.1bn in May, a year-to-date high. This is unlikely to have softened US President Trump’s protectionist stance and his desire to curb the Unites States’ deficits with its largest trading partners, including China.
Friday 26th July
United States: Q2 GDP (first reading). The consensus forecast is that US GDP growth slowed to 1.8% qoq seasonally-adjusted annualised, broadly in line with the Atlanta Fed’s GDPNow estimate of 1.6%, from 3.1% in Q1 2019.
