Economic calendar for week 11th - 15th August 2008.

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Contents This Week:
Economic calendar for week 11th - 15th August 2008.
Commentary: The week ahead.
Economic Calendar for week 11th - 15th August 2008

PLEASE NOTE - All times GMT not BST. BST is +1 Hr.

Monday Aug 11th:

FR - 06:45 - Industrial Production M/M.
UK - 08:30 - PPI Input M/M.
UK - 08:30 - PPI Output M/M.
UK - 08:30 - Trade Balance.
UK - 23:01 - BRC Retail Sales Monitor Y/Y.
UK - 23:50 - RICS House Price Balance.

Tuesday August 12th:

FR - 06:45 - CPI M/M.
UK - 08:30 - CPI Y/Y.
UK - 08:30 - Core PI Y/Y.
UK - 08:30 - DCLG HPI Y/Y.
UK - 08:30 - RPI Y/Y.
US - 12:30 - Trade Balance.
US - 14:00 - IBD/TIPP Economic Optimism.

Wednesday August 13th:

UK - 08:30 - Claimant Count Change.
UK - 08:30 - Average Earnings Index Y/Y.
UK - 08:30 - Unemployment Rate.
EU - 09:00 - Industrial Production M/M.
UK - 09:30 - BOE Inflation Report.
US - 12:30 - Core Retail Sales M/M.
US - 12:30 - Retail Sales M/M.
US - 12:30 - Import Price Index M/M.
US - 12:30 - Business Inventories M/M.
US - 14:35 - Crude Oil Inventories.

Thursday August 14th:

GE - 06:00 - Prelim GDP Q/Q.
GE - 06:00 - Final CPI M/M.
FR - 06:45 - Prelim Non-Farm Payrolls Q/Q.
FR - 06:45 - Prelim GDP Q/Q.
EU - 08:00 - ECB Bulletin.
EU - 09:00 - CPI Y/Y.
EU - 09:00 - Core CPI Y/Y.
EU - 09:00 - Flash GDP Q/Q.
US - 12:30 - Core CPI M/M.
US - 12:30 - CPI M/M.
US - 12:30 - Unemployment Claims.
US - 14:35 - Natural Gas Storage.
US - 18:30 - FOMC Member Stern Speaks.

Friday August 15th:

US - 12:30 - Empire State Manufacturing Index.
US - 13:00 - TIC Net Long-Term Transactions
US - 13:15 - Capacity Utilization Rate.
US - 13:15 - Industrial Production M/M.
US - 13:55 - Prelim UoM Consumer Sentiment.
US - 13:55 - Prelim UoM Inflation Expectations.

EU - Europe wide
FR - France
UK - United Kingdom
US - United States
GE - Germany

The week ahead.

Markets finished last week strongly, with many global indices finally break out the range they had been trading in since July. The Dow Jones Industrial average even managed to register two 300 point rallies in one week.

Interest rate announcements dominated the headlines despite there being no surprises with the decisions to leave rates unchanged. The FOMC created the most excitement, when traders interpreted some of their remarks to mean that the expected rate hikes may take longer to materialise than previously expected. Markets rallied hard on the day as a result. However, as is often the case after an extreme move on a Fed day, markets moved back in the opposite direction the next day.

While equity markets remain in tight trading ranges, major currency pairs experienced some dramatic moves. The EUR/ USD pair finally broke below the 1.53/ 1.60 range that it has been trading within since the Euro’s run up in February. The Euro slumped the most in more than four years against the Dollar, falling to nearly 1.5000. The GBP/ USD also broke below the 1.93 support level significantly for the first time in 2008, as more bad news about the UK economy hit the newswires. While a weak Euro added to the dramatic drop on Friday, the real driver with both these break outs, has been the resurgent Dollar.

Commodities pulled back further last week on speculation that a global slowdown will check demand. Oil closed the week below $120, and Gold continued to fall well below $900, down to $863 on the week. A whole basket of commodities have now fallen back at around 20-40% from their peaks. Oil is close to being down 20% from its peak, natural gas close to registering a 40% drop, Wheat is down 35%, Corn 32%, and rice 30%. Many technical analysts consider a drop from a high of 20% or more officially a ‘bear market’. While a lot of attention has gone on the dramatic fall in equity prices, it is interesting to note that the commodity prices that have led directly to inflationary pressures are also in a bear market. However given the volatility of oil prices in particular, it would not take much for oil to claw back some of its recent losses.
It was a mixed week for financials, down trodden mortgage lender, Freddie Mac announced that it will be slashing its dividend to cover its recent $821 Million loss. UK banks managed to finish the week in positive territory despite a raft of poor earnings announced. There was also further bad news for the UK housing market, with Halifax saying that house prices were down 11% year on year. Prices in the past six months have fallen at an annualized rate of 20%.

Next week brings a raft of top tier UK data, starting with PPI figures on Monday morning, and the Consumer Price Index on Tuesday. Wednesday morning brings the claimant count change, and the BOE inflation report. Wednesday also sees the release of important US retail sales figures, followed by US CPI figures on Thursday. Friday brings a mix of middle to and top tier US announcements, including the Empire State Manufacturing Index, TIC net long term transactions, and University of Michigan Consumers Sentiment.

With the EUR/ USD and GBP/ USD breaking out of their recent ranges in dramatic fashion on Friday, it could be time for the action to transfer to the EUR/ GBP exchange rate, which has so far remained relatively unmoved and still within the range it has been stuck in for the past few months. A one touch trade predicting that the Euro will continue to fall against the pound and touch 0.7775 in the next 16 days could return 68%.

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