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5 Key Economic Events to Watch This Week

Published 2015-08-09, 10:38 a/m
© Reuters.  5 key economic calendar events to watch this week

1. U.S. retail sales data

The U.S. is to release data on retail sales for July on Thursday. The consensus forecast is that the report will show retail sales growth of 0.5% last month, following a decline of 0.3% in June.

Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a weakening economy.

Core sales are forecast to gain 0.4% last month, after decreasing 0.1% in June. Core sales correspond most closely with the consumer spending component of the government's gross domestic product report.

Consumer spending accounts for as much as 70% of U.S. economic growth.

2. Fed Speakers

Federal Reserve Governor Stanley Fischer and Atlanta Fed President Dennis Lockhart are scheduled to speak on Monday. Their comments will be closely watched for further hints regarding the strength of the economy and on the timing of a Fed rate hike.

Lockhart said last week that the Fed was "close" to being ready to raise short-term rates, while adding that it would take "significant deterioration" in the U.S. economy for him to not support a rate hike in September.

Lockhart, a voter this year, is deemed somewhat as a moderate, analysts said, which made his remarks more meaningful.

3. Chinese industrial production data

Traders are awaiting a raft of Chinese economic data in the coming week, including reports on industrial production, fixed asset investment and retail sales all due on Wednesday.

Market analysts expect industrial production figures to show an increase of 6.6% in July, following growth of 6.8% in June.

Government data released on Sunday showed that Chinese inflation for July rose 1.6%, above expectations for 1.5% and up from 1.4% in June.

The producer price index fell by a more-than-expected 5.4% last month, underling concerns over the health of the world's second largest economy.

On Saturday, data showed that the country’s trade surplus narrowed to $43.0 billion last month from $46.5 billion in June, compared to estimates for a surplus of $53.3 billion.

Chinese exports slumped 8.3% from a year earlier, worse than forecasts for a decline of 1.0%, while imports dropped 8.1%, disappointing expectations for a drop of 8.0%.

A slowdown in domestic demand indicated a recovery in the broader economy remains fragile and may need further government stimulus.

4. German ZEW sentiment report & Q2 GDP

The ZEW Institute is to report on German economic sentiment on Tuesday, with market players expecting the index to rise to 32.0 this month from 29.7 in July.

On Friday, the euro zone's largest economy is to publish preliminary data on second quarter economic growth. The consensus forecast is that the data will show GDP growth of 0.5%, following an expansion of 0.3% in the first quarter.

5. U.K. employment data

Investors will be focusing on Wednesday's July employment report for fresh indications on the strength of the economy and the timing of a rate increase.

The U.K.'s unemployment rate was forecast to hold steady at 5.6% in the three months to June, while the claimant count was expected to increase by 1,000 in July, following a gain of 7,000 in June.

The average earnings index, including bonuses, was set to rise by 2.8% in the three months to June, slowing from a gain of 3.2% in the three months to May.

Most market players expect the Bank of England to begin slowly raising interest rates in mid-2016.

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