By Carl Delfeld of com">Chartwell ETF and Chartwell Partners Asset Management
Global markets today are very news driven so it is important to know - and even better to anticipate - what is coming down the pike.
Chris Flood of the Financial Times highlights some of the economic data expected this week that will impact stock markets around the world as well as the ETFs that track them.
For the US, the National Association of Home Builders index, due on Monday, is expected to remain at a record low of 16 in August. Housing starts for July, due out tomorrow, are expected to weaken from 1.07m in June to 960,000. US producer prices for July, also due out on Monday, will show further evidence of rising inflationary pressures. The consensus forecast is for headline PPI to rise from 9.2% year on year in June to 9.4% while the core measure is likely to increase to 3.2%.
The consensus forecast for German (EWG, DAX) producer prices in July, also due tomorrow, is for year-on-year growth to rise to 7.6%, a 26-year high. German investor confidence plunged to its weakest level for almost 17 years, according to the ZEW survey of economic sentiment, reflecting the downturn in the eurozone’s largest economy, which contracted by 0.5 per cent in the second quarter. The recent fall in oil prices could provide a modest boost to the ZEW expectations measure, which is expected to rise from -63.9 in July to -61.8, due on Tuesday.
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The Bank of Japan (EWJ, TYI) is expected to keep its main interest rate unchanged at 0.5% at its monthly meeting on Tuesday so the focus will be on the extent of any downgrade in its assessment of the outlook for the economy.
In the UK, (EWU, LDN) the Bank of England’s minutes, published on Wednesday, will be of interest to see if the three-way split among policymakers on interest rates continued at the August meeting. The CBI’s Industrial Trends survey is expected to signal that activity levels and new orders continued to deteriorate in August in spite of the decline in sterling, which should offer a boost in manufacturing competitiveness.
A deterioration in the UK’s public finances has limited the government’s capacity to respond to the credit crisis. UK retail sales data have been extremely volatile in recent months but further pressure on consumer spending appears inevitable as a result of increases in petrol, utility and food bills. Friday's headline GDP growth is expected to remain unchanged at 0.2% but there is a risk of a downward revision which would underline the growing likelihood that the UK economy will enter recession later this year.
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