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Monday's headline data release will be the German IFO business climate indicator at 0900BST. In the US, the release of new home sales at 1500BST and the Dallas Fed manufacturing survey at 1530BST will be closely watched.
Ifo business climate index seen higher
The German Ifo business climate indicator rose to the highest level since November 2018 in June, with both current conditions and expectations posting monthly gains. The headline index increased to 101.8 and markets expect another gain in July to 102.5. The expectations index jumped to 104, its highest level since December 2010. In July, markets expect a small dip to 103.6. Current conditions rose for the fifth consecutive month in June, registering at a 23-month high of 99.6. Market analysts expect the index to rise for the sixth successive month in July to 101.7.
Other survey evidence is in line with market forecasts. The flash composite PMI surged to a record high in July as demand remained high and companies took in more staff. The ZEW survey saw expectations decline in July, but remained at a historically high level, while current conditions shifted to positive territory for the first time in two years.
Source: Ifo Institute
US new home sales forecast to rise
New home sales declined by 5.9% in May to a seasonally adjusted annual rate of 769,000. Compared to May 2020 new home sales were up 9.2% at 704,000. In July markets expect new home sales to rise by 4.0% to an annual rate of 800,000. The median sales price of new houses in May was USD 374,000, which is below the average price of USD 430,000.
Dallas Fed manufacturing index projected to edge higher
The general business activity index of the Dallas Fed's manufacturing survey eased slightly to 31.1 in June, but remains well above the long-term average of 2.8. In July markets expect the index to increase to 33.0. June's survey saw production and new orders increased significantly, while the company outlook index was up as well.
Other survey evidence provides a mixed picture. While the Kansas City Fed manufacturing index increased further in July, the Philadelphia Fed manufacturing index fell 8.8 points in July.
The main events to look out for on Monday include speeches by BOE's Gertjan Vlieghe and Catherine Mann.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.