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Home » News » Economics » The Week Ahead » The UK, US and the Eurozone in the week ahead
  • UK factory order data tipped to impress despite supply problems.
  • Hopes that US new home sales can reverse recent down trend
  • German Consumer Confidence reading set to remain subdued as vaccine roll out slows


The week starts with Manufacturing and Services PMI readings for August from both sides of the Atlantic. In the Eurozone, a very modest easing from last month’s levels is expected, although the market is likely to be able to take a small decline in its stride. Manufacturing is tipped to slide from 62.8 to around 62, whilst services are expected to drop from 59.8 to around 59.5. Slightly larger declines are forecast in the UK, although numbers will still remain in the high 50’s, well above break-even. A similar situation is anticipated in the US, with Manufacturing PMI set to fall back from July’s all time record high of 63.4, although there may be some concern over the services sector as the forecast print of 59 would be the lowest seen in six months and make for the third successive decline. This in turn may lead to renewed caution at the Fed over the pace at which it can start to taper bond purchases, something that could weigh on the dollar as a result.

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Also on Monday, the CBI Order Book for August will be published, with another strong print expected here. The reading is forecast to come in at +19, in line with the multi-decade high posted in June. The fact that factory activity remains upbeat despite labour shortages and supply chain issues is worthy of note and could arguably hint at pent up demand lasting for some time yet.


Tuesday sees the release of the latest New Homes Sales data from the US for July. After three consecutive months of slowing sales, expectations are that the reading will rebound, something that will prove reassuring for monetary policy hawks. Failure for this trend to be reversed could however add yet more caution to the Fed’s approach – the marked contraction here is certainly at odds with the stories of booming wider economic growth.


On Wednesday, US Durable Goods Order data for July will be issued. Labour and materials supply shortages are expected to take a toll here and push the number back into negative territory following June’s 0.8% uptick. Arguably this is unlikely to cause much concern as a number in isolation, but failure to see those structural issues – which risk constraining growth – being rectified could end up dragging on sentiment in the coming months.


German Gfk Consumer Confidence for September will be released on Thursday. As a forward looking indicator, this reading is always worth watching although it looks set to remain in negative territory yet again. Expectations had been that the August print would be above zero but the shortfall here – combined with a slowing COVID vaccination program – look set to weigh and a number around -0.5, slightly down on the -0.3% from last month – is forecast.


The latest Personal Income and Spending data from the US will be issued on Friday. The critical point here is that spending is forecast to grow by just 0.5% month-on-month. Down from the 1% recorded in June and potentially sending a signal that consumer confidence is waning. Income growth is also tipped to be modest, but if the market is looking for a reason to book profits into the weekend break, these numbers coming in as forecast or possibly even worse could be the necessary catalyst.

This article is not investment advice. Investors should do their own research or consult a professional advisor.

Tony Cross

Tony Cross

Tony Cross is a market commentator with over 15 years of experience, producing compelling, insightful copy for journalists and investors alike. Focusing on macroeconomics, UK blue chip equities and inter market analysis, Cross's commentary is well regarded for its clarity and ability to cut through the waffle. He has been quoted in publications as diverse as The Financial Times, The Times, The Guardian and The Sun. He has also been a regular guest on both Share Radio and TipTV.

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