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MNI GLOBAL WEEK AHEAD - US and UK CPI Headline

Developed Markets

TUESDAY/WEDNESDAY - UK Labour Market and CPI

Next week's labour market and inflation reports provide the first major datapoints since the Bank of England cut rates to 5.00% on August 1. Private sector regular wage growth will once again be the main focus of Tuesday's labour market report. There is no consensus for this particular datapoint, though analysts currently expect a deceleration in average weekly earnings (4.6% vs 5.7% prior) and weekly earnings ex-bonus (5.4% vs 5.7% prior).

The July inflation release is due on Wednesday, where analysts expect headline to rise to 2.3% Y/Y (vs 2.0% prior) on the back of positive energy base effects. Meanwhile, core inflation is seen at 3.4% Y/Y (vs 3.5% prior) while services is expected to fall to 5.5% Y/Y (vs 5.7% prior). The BOE's August MPR forecasts headline CPI at 2.37% Y/Y and services at 5.56%. The August MPR also charted a new spliced services CPI metric, splitting services into “indexed and regulated services” and "other services". This metric was referenced heavily by Governor Bailey in the BOE's press conference, where he noted that the stripped-down services basket has more forward-looking potential, while the “indexed and regulated” portion are much more of a lagging indicator. These series' will be well worth monitoring in the coming months.

TUESDAY/WEDNESDAY - US PPI and CPI

Next week’s economic data is firmly geared around Wednesday’s CPI release and we approach it with closer to 40bp of cuts priced for September vs the far more than 50bps seen in the aftermath of the July payrolls report. That said, PPI (Tue) and retail sales (Thu) still offer potentially significant risk events either side of it, especially so for retail sales with markets debating recession probabilities. Analyst consensus sees core CPI inflation rising to 0.2% M/M in July after a far softer than expected 0.065% M/M in June. Service details were particularly notable in the June, with both an abrupt moderation in housing inflation and also a surprise second month of deflation for non-housing core services (-0.05% after -0.04%) in a dramatic continued reversal of Q1 strength. There were some CPI-idiosyncratic measures at play for the latter, e.g. airfares tumbled -5.0% after -3.6%. Indeed, “supercore” PCE turned out to be stronger at 0.19% M/M in June after 0.18% M/M but it nevertheless was still broadly consistent with 2% inflation for also significant moderation after the 0.45% M/M averaged in Q1. Details within the CPI report will as always ultimately shape the market reaction although with PPI unusually landing beforehand, post-CPI core PCE estimates should be more accurate.

WEDNESDAY - RBNZ Decision

The RBNZ decision is on August 14 and updated staff forecasts will also be provided. Some are expecting it to cut rates 25bp following weak data since the last meeting in July. We believe it is still too early with domestic inflation remaining elevated and expect the MPC to take the opportunity to communicate its easing intentions helped by the updated projections which include a profile for the OCR. Thus, the timing of inflation's return to target, which was H2 2024 in the May forecasts, and the OCR path will be scrutinised.

WEDNESDAY - Sweden CPI

Swedish July CPIF ex-energy is expected at 2.0% Y/Y (vs 2.3% prior). Such a reading would imply a forecast error of 0.2pp with the Riksbank's June projections (of 2.2% Y/Y). Barring a sizeable upside surprise to the Riksbank's forecasts, the data is unlikely to dissuade the Riksbank from cutting rates on August 20. In June, CPIF ex-energy was 2.3% Y/Y (vs 2.5% Riksbank), meaning the July reading is already set up to mechanically undershoot the central bank's forecasts.

WEDNESDAY - Eurozone Q2 GDP Second Estimate

The preliminary (second) estimate of Eurozone Q2 GDP is expected to be unchanged from the advance (first) release, at 0.3% Q/Q and 0.6% Y/Y. Of greater interest will be the Q2 employment and real productivity per employee estimates. Eurosystem staff projected real productivity at -0.3% Q/Q in the ECB's June macroeconomic projections. Such a reading would mark the sixth successive quarter where real productivity per employee has been negative on a Q/Q basis.

THURSDAY - Norges Bank Decision

The Norges Bank are unanimously expected to leave the policy rate on hold at 4.50% once again at its meeting on August 15. The policy statement and accompanying guidance will thus be in focus, with recent krone weakness needed to be weighed against lower-than-expected inflation outcomes. The August meeting will not feature a monetary policy report or revised set of forecasts/rate path projections. The MNI Markets Team expects the policy statement to acknowledge the improved inflation outlook, but fall short of any meaningful tilt in guidance. The weak krone is the one factor behind this view, while the Norges Bank may also want to push back on the recent dovish repricing in market rate cut expectations, spurred by the recent deterioration in global risk-sentiment.

Emerging Markets

THURSDAY - BSP Decision (Philippines)

The Bangko Sentral ng Pilipinas (BSP) has its monthly meeting next week on 15 August. The market expects no change from the meeting. Household demand has remained robust, supported by the strength of remittances from abroad whilst trade data has weakened. With a target of 2-4%, July’s CPI print of 4.4% is above the range and likely underpins a pause in any policy action, especially in the face of global financial markets volatility.


DateGMT/LocalImpactFlagCountryEvent
12/08/2024-***CN Money Supply
12/08/2024-***CN New Loans
12/08/2024-***CN Social Financing
12/08/2024-UK BOE's Mann FT podcast "The Economic Show with Soumaya Keynes"
12/08/20241230/0830*CA Building Permits
12/08/20241500/1100**US NY Fed Survey of Consumer Expectations
12/08/20241530/1130*US US Treasury Auction Result for 13 Week Bill
12/08/20241530/1130*US US Treasury Auction Result for 26 Week Bill
12/08/20241600/1200***US USDA Crop Estimates - WASDE
12/08/20241800/1400**US Treasury Budget
13/08/20240130/1130***AU Quarterly wage price index
13/08/20240600/0700***UK Labour Market Survey
13/08/20240700/0900***ES HICP (f)
13/08/20240900/1100***DE ZEW Current Conditions Index
13/08/20240900/1100***DE ZEW Current Expectations Index
13/08/20240900/1000**UK Gilt Outright Auction Result
13/08/20241000/0600**US NFIB Small Business Optimism Index
13/08/20241230/0830***US PPI
13/08/20241255/0855**US Redbook Retail Sales Index
13/08/20241530/1130*US US Treasury Auction Result for Cash Management Bill
13/08/20241715/1315US Atlanta Fed's Raphael Bostic
14/08/20240200/1400***NZ RBNZ official cash rate decision
14/08/20240600/0700***UK Consumer inflation report
14/08/20240600/0700***UK Producer Prices
14/08/20240600/0800***SE Inflation Report
14/08/20240645/0845***FR HICP (f)
14/08/20240900/1100**EU Industrial Production
14/08/20240900/1100***EU GDP (p)
14/08/20241100/0700**US MBA Weekly Applications Index
14/08/20241230/0830***US CPI
14/08/20241430/1030**US DOE Weekly Crude Oil Stocks
15/08/20242350/0850***JP Japan GDP 1st Estimate
15/08/20240130/1130***AU Labor Force Survey
15/08/20240200/1000***CN Fixed-Asset Investment
15/08/20240200/1000***CN Retail Sales
15/08/20240200/1000***CN Industrial Output
15/08/20240200/1000**CN Surveyed Unemployment Rate M/M
15/08/20240430/1330**JP Industrial Production
15/08/20240600/0700**UK UK Monthly GDP
15/08/20240600/0700**UK Trade Balance
15/08/20240600/0700***UK GDP First Estimate
15/08/20240600/0700**UK Index of Services
15/08/20240600/0700***UK Index of Production
15/08/20240600/0700**UK Output in the Construction Industry
15/08/20240800/1000***NO Norges Bank Rate Decision
15/08/20241230/0830***US Jobless Claims
15/08/20241230/0830**US WASDE Weekly Import/Export
15/08/20241230/0830**US Import/Export Price Index
15/08/20241230/0830**CA Wholesale Trade
15/08/20241230/0830***US Retail Sales
15/08/20241230/0830**US Empire State Manufacturing Survey
15/08/20241230/0830**US Philadelphia Fed Manufacturing Index
15/08/20241300/0900*CA CREA Existing Home Sales
15/08/20241315/0915***US Industrial Production
15/08/20241400/1000*US Business Inventories
15/08/20241400/1000**US NAHB Home Builder Index
15/08/20241430/1030**US Natural Gas Stocks
15/08/20241710/1310US Philly Fed's Pat Harker
15/08/20242000/1600**US TICS
16/08/20240600/0700***UK Retail Sales
16/08/20240900/1100*EU Trade Balance
16/08/20241215/0815**CA CMHC Housing Starts
16/08/20241230/0830*CA International Canadian Transaction in Securities
16/08/20241230/0830**CA Monthly Survey of Manufacturing
16/08/20241230/0830***US Housing Starts
16/08/20241400/1000**US U. Mich. Survey of Consumers
16/08/20241700/1300**US Baker Hughes Rig Count Overview - Weekly

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