MNI GLOBAL WEEK AHEAD: Chinese Data Drop Raises Focus on Stimulus Hopes

WEDNESDAY – CHINESE CONSUMER, PRODUCER INFLATION

Chinese CPI is expected to have fallen into deflationary territory in July, with the headline Y/Y reading seen at -0.5%, while the rate of PPI deflation is expected to ease to -4.0% Y/Y from the -5.4% seen in June. Policymakers have stepped in with easing measures but have refrained from deploying meaningful fiscal stimulus at the household level, choosing to focus on the property sector and private economy.

On the PPI side, CNY-adjusted oil prices remain comfortably below levels seen at this time last year, despite the recent rebound, while mined commodities and housing price dynamics also present downside impetus.

Elsewhere, Chinese credit data is set to cross between 9-15 August, with money supply growth expected to slow, while aggregate financing and new yuan loans are expected to pare back after June’s notable jump higher. The idea of a Chinese balance sheet recession has gained more airtime, although views on that front are varied. Those who have pushed the idea lean into the need for meaningful fiscal stimulus, playing down the need for deeper monetary easing.

THURSDAY – NORWAY CONSUMER INFLATION

The July release of Norwegian inflation is expected to show Y/Y CPI slowing to 5.9% from 6.4% previously, despite a pick up in M/M CPI to 0.9%. More importantly for markets, the Norges Bank’s preferred inflation gauge - CPI-ATE underlying inflation - is expected to slow.

Core inflation has been particularly sticky in Norway, reaching a new cycle high of 7.0% in June and forcing the Bank to re-initiate a faster pace of tightening. The bank look likely to raise the deposit rate by a further 25bps on August 17^th, with September’s policy report key for rates into year-end.

THURSDAY – US CONSUMER INFLATION

Consensus pencils in core CPI at 0.2% M/M in July after 0.16% M/M in June, which if realized would be a second notably softer print after six months before that running at 0.4% or higher. The more hawkish FOMC participants have previously been keen to stress the need to see a sustainable moderation lower, but two softer prints, especially if another ‘low' 0.2 for a rate consistent with the 2% target, could help firm market expectations that the Fed’s hiking cycle is over (currently showing a cumulative 8bps of additional tightening after the payrolls report). The previous emphasis placed on core non-housing service inflation should again see it in focus, and another print close to the exactly flat June reading would likely be met with a further dovish market reaction. There is however another round of both payrolls and CPI reports before the next FOMC decision, plus the July core PCE report after it too printed its first reading consistent with 2% inflation since Jul’22 and before that Feb’21 in June.

THURSDAY – BANXICO RATE DECISION

Banxico are expected to keep policy unchanged, with the key overnight rate at 11.25%, on Thursday. This makes Mexican policy stand out against other Latam peers, with both the Brazilian and Chilean central banks initiated easing cycles in the past week or so. The Bank are expected to point to continued uncertainty surrounding the pullback in inflation as justification for retaining tight policy.

Date	GMT/Local	Impact	Flag	Country	Event
07/08/2023	0545/0745	**		CH	Unemployment
07/08/2023	0600/0800	**		DE	Industrial Production
07/08/2023	1230/0830			US	Fed's Michelle Bowman, Raphael Bostic
07/08/2023	1530/1130	*		US	US Treasury Auction Result for 26 Week Bill
07/08/2023	1530/1130	*		US	US Treasury Auction Result for 13 Week Bill
07/08/2023	1600/1700			UK	BOE Pill speaks at the MPR Live Q&A
07/08/2023	1900/1500	*		US	Consumer Credit
08/08/2023	2301/0001	*		UK	BRC-KPMG Shop Sales Monitor
08/08/2023	0405/1205	***		CN	Trade
08/08/2023	0600/0800	***		DE	HICP (f)
08/08/2023	0645/0845	*		FR	Foreign Trade
08/08/2023	0900/1000	*		UK	Index Linked Gilt Outright Auction Result
08/08/2023	1000/0600	**		US	NFIB Small Business Optimism Index
08/08/2023	1215/0815			US	Philadelphia Fed's Pat Harker
08/08/2023	1230/0830	**		CA	International Merchandise Trade (Trade Balance)
08/08/2023	1230/0830	**		US	Trade Balance
08/08/2023	1230/0830			US	Richmond Fed's Tom Barkin
08/08/2023	1255/0855	**		US	Redbook Retail Sales Index
08/08/2023	1400/1000	**		US	IBD/TIPP Optimism Index
08/08/2023	1400/1000	**		US	Wholesale Trade
08/08/2023	1530/1130	**		US	US Treasury Auction Result for 52 Week Bill
08/08/2023	1530/1130	*		US	US Treasury Auction Result for Cash Management Bill
08/08/2023	1700/1300	***		US	US Note 03 Year Treasury Auction Result
09/08/2023	0130/0930	***		CN	CPI
09/08/2023	0130/0930	***		CN	Producer Price Index
09/08/2023	0900/1000	**		UK	Gilt Outright Auction Result
09/08/2023	1100/0700	**		US	MBA Weekly Applications Index
09/08/2023	1230/0830	*		CA	Building Permits
09/08/2023	1430/1030	**		US	DOE Weekly Crude Oil Stocks
09/08/2023	1700/1300	**		US	US Note 10 Year Treasury Auction Result
10/08/2023	0600/0800	*		NO	CPI Norway
10/08/2023	0600/0800	**		SE	Private Sector Production
10/08/2023	0800/1000	**		IT	Italy Final HICP
10/08/2023	1230/0830	**		US	Jobless Claims
10/08/2023	1230/0830	**		US	WASDE Weekly Import/Export
10/08/2023	1230/0830	***		US	CPI
10/08/2023	1430/1030	**		US	Natural Gas Stocks
10/08/2023	1700/1300	***		US	US Treasury Auction Result for 30 Year Bond
10/08/2023	1800/1400	**		US	Treasury Budget
10/08/2023	1900/1500			US	Atlanta Fed's Raphael Bostic
11/08/2023	0600/0700	**		UK	UK Monthly GDP
11/08/2023	0600/0700	**		UK	Index of Services
11/08/2023	0600/0700	***		UK	Index of Production
11/08/2023	0600/0700	**		UK	Trade Balance
11/08/2023	0600/0700	**		UK	Output in the Construction Industry
11/08/2023	0600/0700	***		UK	GDP First Estimate
11/08/2023	0645/0845	***		FR	HICP (f)
11/08/2023	0700/0900	***		ES	HICP (f)
11/08/2023	-	***		CN	Money Supply
11/08/2023	-	***		CN	New Loans
11/08/2023	-	***		CN	Social Financing
11/08/2023	-	***		CN	Social Financing
11/08/2023	1230/0830	***		US	PPI
11/08/2023	1400/1000	**		US	U. Mich. Survey of Consumers
11/08/2023	1600/1200	***		US	USDA Crop Estimates - WASDE