Market movers today
Focus will remain on uncertainty related to the situation in Ukraine (see more below). In terms of data releases the main event is US retail sales for July, where we expect a modest 0.2% m/m increase. This should follow as the temporary boost from the weather slump in early 2014 continues to wane. Excluding autos and gasoline retail sales are expected to show a more healthy gain, so the underlying trend remains OK.
In the UK the Inflation Report from Bank of England (BoE) will be released. In light of falling unemployment and improvement in other labour market indicators BoE could indicate that labour market slack has been reduced faster than expected and it could pave the way for an interest rate hike later this year. Interestingly, the labour market report for June will be released just ahead of the inflation report.
In the euro area we expect industrial production to have increased 0.6% m/m in June, which is a bit more than consensus. However, we believe there is mainly upside risk to our forecast due to relatively strong data in France and Italy recently.
New York Fed president Dudley (dove, voter) and Boston Fed president Rosengreen (dove, non-voter) are scheduled to speak this afternoon in connection with a conference covering Risks of Wholesale Funding. It will probably be technical presentations with no views on overall monetary policy. That said, Dudley's views are important because they are believed to be close to chairwoman Yellen's.
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