With nonfarm payrolls out of the way, investors are looking for the next big data release to drive market possibilities. Luckily, the post-Brexit environment has provided ample liquidity for traders to score by longing and shorting various markets.
For investors monitoring the economic calendar, below is a list of upcoming releases that are expected to make headlines in the second half of July.
July 14
Bank of England (BOE) Monetary Policy Announcement: According to BOE Governor Mark Carney, the British central bank could be ready to ease monetary policy further over the summer.[1] That outlook will be put to the test on July 14 when the Bank’s Monetary Policy Committee votes on interest rates.
July 15
China Q2 GDP: The world’s second-largest economy has the power to move the financial markets on the 15th when it announces its second quarter GDP data. China’s economy expanded 6.7% in the first quarter, the slowest expansion in seven years. Growth is expected to slow even further in the second quarter, raising the possibility of additional monetary easing from the central bank.
US Retail Sales: Consumer spending accounts for more than two-thirds of US economic activity and retail sales are seen as a key proxy of consumers’ spending habits. The Commerce Department will issue its June retail sales report on the 15th of July.
July 21
European Central Bank (ECB) Interest Rate Decision: The ECB will issue its next interest rate decision less than two weeks after the International Monetary Fund (IMF) downgraded its outlook on Eurozone growth.[2] Brexit is expected to have adverse effects on the 19-member currency region, making the interest rate announcement on July 21 of particular interest.
July 27
Australia Q2 Consumer Price Index: Unlike other governments, which issue their inflation data monthly, Australia produces its official consumer price index (CPI) once every quarter. Australia is currently experiencing its worst bout of deflation since record keeping began. The quarterly inflation report will provide clues about whether the Reserve Bank of Australia will ease monetary policy further at its next meeting.
Federal Reserve Monetary Policy Statement: Despite a robust nonfarm payrolls report, the Federal Reserve is unlikely to raise interest rates later this month. But that won’t stop market participants from speculating about the contents of the official rate statement, which will be released on July 27.
July 29
Germany Consumer Price Index (July): Europe’s largest economy will release preliminary consumer inflation data at the end of the month. This release provides a good proxy for euro-wide inflation, which has significant implications on central bank policy.
Japan National Consumer Price Index (June): After Prime Minister Shinzo Abe’s big election victory in the upper house, investors are looking for a new round of stimulus measures from the Japanese central bank. The June inflation report could provide clues about how quickly the Bank of Japan (BOJ) will deploy its new easing measures. The world’s third-largest economy has succumbed to deflation for three consecutive months. Another month of sub-zero inflation could raise pressure on the BOJ to act sooner rather than later.
[1] Roger Blitz (June 30, 2016). “Pound resumes sliding after Carney signals monetary easing.” Financial Times.
[2] Sam Bourgi (July 10, 2016). “IMF Downgrades Eurozone Economic Outlook after Brexit Vote.” Economic Calendar.
