MNI Global Morning Briefing

     LONDON (MNI) - Wednesday throws up a heavy data day, although largely

loaded towards the US.

     The calendar starts in the UK at 0830GMT, when the July consumer price

index data is released. For the month of June, inflation surprised to the

downside growing by 2.4% y/y. Analyst expect inflation growth of 2.5% in July

and core inflation to remain at 1.9%. Producer input prices are expected to rise

a touch from 10.2% y/y to 10.3%. Producer output prices y/y are expected to fall

slightly from 3.1% y/y to 3.0%. 

     Moving Stateside and a triple release of data comes out at 1230GMT. These

are retail sales, preliminary non-farm productivity and The Empire State

manufacturing survey. 

     Retail sales are forecast to rise by 0.1% in July after a 0.5% gain in June

and a 1.3% jump in May. Not seasonally adjusted industry motor vehicle sales

slowed a bit in July, while AAA reported that gasoline prices halted their sharp

gains, falling in mid-July from one month earlier, the latter reflected in a

decline in CPI gasoline prices. Retail sales are expected to rise 0.4% excluding

motor vehicles after a 0.4% rise in June, while analysts see the core measures

breaking out of the recent trend of solid gains. If the data are in line with

expectations, it suggests continued sales growth, but at a much slower pace than

in the second quarter.

     Nonfarm productivity is expected to rise 2.5% in the second quarter after

modest gains in the previous two quarter, lifted by the much stronger output

data in the GDP report. Unit labour cost growth is expected fall by 0.5% from

2.9% in the first quarter.

     The Empire State index is expected to fall to a reading of 19.0 in August

after falling to 22.6 in July.

     Industrial production in the US (1315GMT) is expected to rise 0.3% in July

after a rebound in June. Factory payrolls rose by 37,000 in June, while auto

production jobs rose by 6,000 and the factory workweek was unchanged at 40.9

hours. The ISM production index fell to 58.5 in the current month from 62.3 in

the previous month. Utilities production is expected to continue its downward

trend in the month , while mining production is forecast to post a sixth

straight gain. Capacity utilization is forecast to rise slightly to 78.2% from

78.0% in June.

     Business inventories (1400GMT) are expected to rise 0.1% in June. Factory

inventories were already reported up 0.1% in the month, while wholesale

inventories rose 0.1%. The advance report showed a flat reading for retail

inventories. Taken together, an MNI calculation looks for a 0.1% increase for

business inventories, so the median forecast suggests analysts see no revision

to retail inventories. As for sales, factory shipments were up 1.0%, wholesale

sales fell by 0.1% and the advance estimate for retail trade sales was a 0.3%

gain, suggesting a 0.4% gain for business sales, assuming no large revision to

the retail trade sales increase.

     At 1600GMT, BBK Board member Johannes Beermann speaks in Dusseldorf,

Germany. 

     Moving to the late evening and the conclusion of Wednesday's calendar,

Japan release their trade balance data at 2350GMT. The previous trade balance of

JPY721 is expected to move into a deficit of JPY70.0. The drivers behind this

appear to be expected import growth y/y of 15.2% outstripping export growth y/y

of 6.6%. 

     Finishing in Australia at 0130GMT is the Melbourne Institute Inflation

Expectations Survey and monthly labour force survey. The previous unemployment

rate of 5.4% is expected by the MNI median to remain unchanged. 

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com