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Europe's data calendar remains quiet Tuesday with the only release of note being German producer price inflation at 0700BST. In the US the release of housing starts and building permits and the Philadelphia Fed nonmanufacturing index will be closely watched at 1330BST.
German PPI seen rising further
The annual producer price index is forecast to rise further in June to 8.6%, while monthly producer prices are seen at 1.2%. The annual PPI jumped to 7.2% in May, showing the highest reading since October 2008. Monthly prices rose by 1.5% in May, which is also the largest monthly increase since the global financial crisis. The main drivers of May's increase were higher prices for intermediate goods and energy. Destatis noted that rising demand and raw material shortages were likely the reason of higher prices for intermediate goods. Survey evidence suggests that these issues persist. The IHS manufacturing PMI saw factory gate prices rise to a new record high in June.
Source: Destatis
US building permits expected to rebound
Building permits in the US declined by 3.0% in May to 1,681,000 units, down from 1,733,000 units seen in April. However, annual building permits were up 34.9% in May. In June markets expect the indicator to rise by 1.0% to 1,700,000 units. Meanwhile, housing stars rose by 3.6% in May to an annual rate of 1,572,000. Market analysts expect housing starts to decelerate to 1.2% in June to an annual rate of 1,590,000.
Philadelphia Fed nonmanufacturing index up sharply in June
The general business index of the Philadelphia Fed nonmanufacturing survey rose sharply in June by 34.6 points to 56.7, as almost 70% respondents reported an increase in business activity. While new orders and sales increased significantly as well in June, employment declined. Prices paid remained elevated in June with none of the respondents reporting a decrease. Nevertheless, firms remained optimistic regarding the outlook in the coming months.
The events calendar remains quiet on Tuesday with no speeches scheduled for the day.
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.