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The UK, US and the Eurozone in the week ahead

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  • US earnings season underway
  • ECB rate decision
  • UK inflation update

Monday 18th July

 It is a Japanese Bank holiday, and overnight we have the latest update on UK house prices from Rightmove. From the Euro zone we have the Italian Trade Balance and the German Bundesbank’s monthly report. Then, Bank of England MPC member Michael Saunders is due to speak at the Resolution Foundation, in London. Later, from the US, there’s the NAHB Housing Market Index and TIC Long-Term Purchases. Monday’s big earnings announcements come from Bank of America, Bank First, Goldman Sachs, Healthcare Services, and IBM.

Tuesday 19th July

The Reserve Bank of Australia (RBA) releases the minutes from its last monetary policy meeting. This was when the central bank raised its key Cash Rate to 1.35% from 0.85%, as expected. This was its third consecutive monthly rate hike, which has taken its Cash Rate to its highest level in over three years. This is compounding the pain for Australia’s mortgage holders as their borrowing costs rise. Yet the rate hikes haven’t helped the Aussie dollar which remains near a two-year low against the US dollar. We have an update on UK unemployment which continues to be a bright spot in the UK’s economy. The Unemployment Rate is still hovering around multi-decade lows as the Claimant Count is on course to fall for its sixteenth consecutive month. Meanwhile, Average Earnings remain elevated and approaching the highs seen this time last year. Later in the day we have the final reading on Euro zone CPI, and then US Building Permits and Housing Starts. Bank of England Governor Andrew Bailey is due to speak at the Mansion House Financial and Professional Services Dinner. The biggest earnings come from Ally Financial, Halliburton, Harley Davidson, Hasbro, Johnson & Johnson, Las Vegas Sands, Travelzoo, and Netflix.

Wednesday 20th July

The day kicks off with the release overnight of Australia’s Leading Index and a speech from the Reserve Bank of Australia’s Governor Philip Lowe. Then we have the latest update on UK inflation via the Consumer Price Index (CPI) and Retail Price Index (RPI). As we know, inflation picked up in the second half of last year. But it has positively skyrocketed in 2022 to a 40-year high with some analysts expecting it to hit double figures. Seeing as it stood at 0.8% in April last year, that is quite an achievement, and one that the Bank of England is incapable of halting. Later in the session Canada releases its own CPI update, while we get Consumer Confidence from the Euro zone. Then we have US Existing Home Sales and weekly Crude Oil Inventories. The major earnings reports come from Abbott Labs, Alcoa, Baker Hughes, CSX Corp, Tesla, and United Airlines.

Thursday 21st July

From Australia we have the NAB Quarterly Business Confidence survey. From the UK we have Public Sector Net Borrowing. But the main event is the European Central Bank’s (ECB) monetary policy meeting. The ECB has been even further behind the curve than the US Federal Reserve and the Bank of England when it comes to tightening monetary policy to deal with inflation. But the ECB has been signalling that it is prepared to raise rates at this meeting, with most observers anticipating a hike of 50 basis points to the headline Main Refinancing Rate. But whether this will be enough to halt the slide in the single currency is another matter entirely. ECB President Christine Lagarde will start her usual press conference at 13:45 BST, half an hour after the monetary policy statement release. Then from the US we have the Philly Fed Manufacturing Index, Weekly Unemployment Claims, and the CB Leading Index. Key earnings reports come from AT&T, American Airlines, Capital One, DR Horton, Mattel, Nokia, Philip Morris, Snap, and Travelers.

Friday 22nd July

Overnight sees the release of Australian Flash Manufacturing and Services, the UK’s GfK Consumer Confidence, and Japan’s National Core CPI and Flash Manufacturing PMI. Then we have UK Retail Sales with Canadian Retail Sales later in the day. But it is Flash Manufacturing and Services PMIs which dominate, with updates coming from Germany, France, the Euro zone, UK, and US. The day’s major earnings reports include American Express, HCA Healthcare, Schlumberger, and Verizon.

David Morrison is an Analyst with Trade Nation. Trade Nation was set up with the specific remit to help customers realise their trading goals by changing the way they engage with the financial markets. As well as providing full transparency and making sure all customers get a fair deal, Trade Nation is fully regulated. This means customers can be confident they’re getting the trading experience they deserve. Visit www.tradenation.com to find out more

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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