The ongoing housing recession, mounting job losses, and indications of slowing consumer spending leads many to believe that the US economy is in the midst of a real economic recession, and the upcoming GDP report will go a long way to dispel or confirm such pessimistic sentiment.
Economic expansion in the UK is anticipated to slow significantly during Q2 to match a three-year low of 1.6 percent, down from 2.3 percent in Q1. If anything, the odds are in favor of a more dramatic slowing.
Retail spending in the UK is anticipated to have contracted 2.6 percent during June, following a 3.5 percent gain during the month prior, which happened to be the largest rise since 1979.
The release of the minutes from the Bank of England’s July meeting -- when the Monetary Policy Committee left rates unchanged at 5.00 percent -- presents major event risk for UK assets, as they are likely to reflect much of the same mixed sentiment seen in the meeting minutes from June.
Canadian retail sales are anticipated to jump 0.6 percent during the month of May, suggesting that consumption remains strong and will be a positive contributor to Q2 GDP.
Friday’s economic calendar will be very light, and while the release of German producer prices could be market-moving for European assets, the impact may be very short-lived since the news will focus on one specific economy, rather than the entire Euro-zone.
Thursday’s US economic releases don’t tend to be incredibly market-moving, and given the heavy volatility we’ve seen throughout the markets this past week, price action may die down quite a bit. Regardless, the indicators will be worth watching, as extremely surprising numbers could shake things up.
The US headline consumer price index for the month of June is expected to rise 0.7 percent upon release at 8:30 ET, while the annual rate of growth is forecasted to jump to a nearly 3-year high of 4.5 percent.
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