Market movers today
Today is set to be another quiet day in terms of data releases. In the US, the NFIB Index of Small Business Optimism for July will be released. Since the index soared at the end of 2016, it has drifted downwards and we expect this trend to continue. Hence, we expect the index to come in at 103.
German trade balance figures for June are released today and are likely to attract attention given increasing emphasis on the competitive German export industry and potential protectionist retaliation. The increasingly strong EUR may however eventually lessen the German trade surplus (see Euro Area Research: Growth tailwinds dominate headwind from EUR near term , 4 August).
In China, we will get numbers for CPI and PPI for July tomorrow morning. When it comes to CPI inflation, we look for it to be broadly flat at 1.5% - still far below the 3.0% target. We estimate PPI inflation fell slightly from 5.5% to 5.3%, as we believe base effects pulled it down a bit.
For Norway, we have modified our forecast for core inflation due on Thursday to 0.3% m/m. If proven right, this would lower the yearly core inflation rate by 0.4pp to 1.2% in a drop not least driven by significant base effects from July 2016's significant rise in food prices and air fares. As such, a drop in the yearly rate is widely expected by markets. Also Norges Bank (NB) pencilled in a quarterly drop in the core measure to 1.08% y/y. As NB no longer provides monthly inflation forecasts, it is difficult to deduce NB's expectations for Thursday's print (first monthly print in Q3).
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