Focus this week will be on the FOMC meeting on Wednesday. The markets will be looking for signals as to the timing of the first rate hike, as a further decline in unemployment and a rise in inflation recently has put the issue on the agenda, see also Research: Focus on first Fed hike to intensify , 10 June 2014.
Today focus will be on final euro inflation data and a string of US manufacturing and housing data.
In the euro area inflation for May is expected to be confirmed at 0.5% y/y. Core inflation should also be unchanged at 0.7%.
The US empire index is expected to fall back slightly to 15 in June after reaching a two-year high in May at 19. US industrial production should rebound in May following a soft April reading. It is forecast to rise 0.5% m/m, up from -0.6% in April.
Finally the US NAHB housing market index is expected to rise slightly to 47 from 45. The index declined in the beginning of the year but has flattened out in the past couple of months. We believe housing is about to recover gradually again as the effect of last year's mortgage rate rise is expected to reverse as mortgage rates have come down again.
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