The Week Ahead, 25 – 29 July.
London, Monday, 25 July 2022
With the FOMC decision, earnings, and economic data taking centre stage, it will be a very busy week in the US. Expectations point to the Fed raising rates for a second consecutive time by 75 basis points, which would bring borrowing costs to their highest level since 2019.
Additionally, almost a third of the S&P 500 businesses, including Apple, Microsoft, Google parent Alphabet, Amazon, Meta Platforms, 3M, Boeing, Ford, and Intel, will publish their quarterly results. On the data front, the preliminary estimate of GDP is anticipated to reveal that the American economy expanded by an annualised 0.4 percent in Q2, reversing a Q1 drop of 1.6 percent.
Several regional indicators, such as the Chicago, Dallas, Richmond, and Kansas Fed Manufacturing Index and Chicago PMI, the S&P/Case-Shiller and FHFA house price indexes, the CB consumer confidence index, new and pending home sales, and durable goods orders are also significant releases.
The Bank of England's monetary indicators and the CBI gauges for factory orders, business optimism, and distributive sales will be the only economic reports released in the UK this week.
The biggest economies in the Eurozone—Germany, France, Italy, and Spain—will publish significant statistics on growth and inflation rate. The second quarter of the bloc's GDP is predicted to increase by a meagre 0.1 percent, but the prognosis is still gloomy since the ECB began its tightening cycle as record inflation levels began eroding consumer spending power.
In July, the inflation rate for the Euro Area is predicted to increase to a new high of 8.7 percent. At the same time, business sentiment most certainly hit a 2-year low and German consumer sentiment is expected to reach a record low heading into August.
Data on employment will also be released for Germany, France, and Spain. Other important data include the Eurozone business survey, the second-quarter GDP for Sweden, the KOF leading indicators and retail sales for Switzerland, and the manufacturing and international trade confidence indicators for Turkey.
Japan will be releasing a tonne of data for the Asia Pacific region, including statistics on the unemployment rate for June, retail sales, industrial output, and consumer sentiment for July.
The Reserve Bank of Australia is expected to raise interest rates by 75 basis points as a result of the annual inflation rate in Australia expected to reach 6.3 percent for the quarter ending in June, the highest level since 1990. In addition, June retail sales and Q2 producer prices will be disclosed.
The focus will be on industrial earnings and foreign direct investment in China. Finally, it is anticipated that South Korea's Q2 GDP figures would reveal sluggish growth.
(Source: Trading Economics // Edited by: The Decision Maker – Finance editors)