Today is a national bank holiday in the UK there is no data out from the UK this morning. The first notable data releases will come from the US and include Core PCE price index which is anticipated to come in at a 0.1% from last month’s reading of 0.2%. The figure measures the goods and services consumed by individuals and the figure provides a great overview into consumer spending behaviour. Following the Core PCE index we have the monthly release of US personal spending which is anticipated to fall from 0.4% to 0.3%. As a large part of the US economy it will be interesting to see if the data tallies with Fridays US calendar results.
No doubt if results meet or exceed expectations the dollar will gain further support.
On Tuesday there are a host of data releases from Japan, Australia, Euroland, Switzerland, UK Canada and the US. Tuesdays most market influential data includes Japanese household spending, Australian building approvals, German Prelim CPI and US consumer confidence.
Japanese Household spending which is expected to improve over last month’s -2.2% to -1.3%. The data which will potentially compound the BOJ’s Haruhiko Kuroda statement at Jackson Hole whereby he underlined that id needed Japan could look to further QE in order to reach their inflation expectations. No doubt if a poor figure delivered the question of QE will once again be at the forefront. As consumer spending is vital to the Japanese economy and part of their current QE objectives.
Following data from Japan we have the monthly Australian building approvals are anticipated to recover from last month poor figure of -2.9% to 1.2%. In recent months the figure has been below par so if was to manage the targeted 1.2% it could bode well for the AUD. The data release is important as it give a wide view the construction sector.
Tuesday morning focus turns to Europe and the UK with German prelim CPI, KOF economic Barometer from Switzerland and Spanish CPI y/y.
As the leading nation German CPI will play the biggest role for the Eurozone today. The CPI data is expected show a slowdown month on month from 0.3% to 1.3% no doubt compounding Merkels Brexit worries which have been voiced over the last few days. Following the German CPI we have the KOF Swiss economic barometer which is used to predict the direction of the Swiss economy over the next 6 months. The last few months have produced mixed results and the figure is projected to reach 103.1 anything over this will be good for the CHF.
The final piece of euro data come in the form of Spanish yearly CPI which is expected to show inflation slowing to -0.5%.
Following the Eurozone data, we will see the release of UK’s monthly Net lending to individuals which is expected to reach 4.9B. if this figure is reached or exceeded it will show banks appetite to lending and the UK’s appetite to spend is healthy and no doubt will allay any Brexit fears.
During the afternoon we have data from the US and Canada. Canadian data includes current account figures and RMPI m/m which demonstrates any price change in raw materials. The last figure released in saw a huge shrink from 7.0% to 1.8% in July.
The last data of the is US consumer confidence the last two months has been good with readings over the expected levels, however it will be interesting to see whether this continues with the upcoming elections and divided opinion. A positive number over 97.2 would be supportive for the dollar.
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