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Trading Radar: Global Manufacturing and US Inflation Data Are Key Concerns

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Economics, earnings reports, and market events for the week ahead.

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On Friday it was reported that Russian military forces had crossed Ukraine's border in conjunction with its humanitarian convoy, in an apparent violation of its sovereignty. In response, Ukraine forces reportedly destroyed part of the convoy. The market's response was a 100bp decline in the S&P 500 (SPX), although some was recovered when the UN said that it could not verify if the battle had in fact taken place. Treasury yields continued to fall with the 10yr and 30yr yield making new year-to-date lows. Crude oil, both WTi and Brent, both rallied strongly showing that the market was clearly concerned about the recent developments. As such, the main risk over the weekend is how that situation plays out.

Most of next week's data scheduled to be reported in the US is from housing. On Monday it is the sentiment survey for August. On Tuesday it is the housing starts and building permits for July. The other two events of note are July consumer prices and the release of the minutes from the FOMC meeting three weeks ago. The most significant event of the week will most likely be the CPI data with the recent attention given to the inflation data. On Friday, input prices continued to slow their rate of expansion, which indicates that the current inflation trend has ended at month 13. In terms of housing

The release of all the major manufacturing indices on Thursday morning will be a decisive event for the week. China, in particular, has been on a strong growth path for the past four months and has caused most funds to increase their underweight allocations. They will be closely watching the result of the preliminary August manufacturing data. Additionally, the spate of poor European data in the past week has unnerved a few participants. Global fixed income investors will be watching the release of the Bank of England minutes on Wednesday morning. It was expected by many in the market that there would be an increased amount of dissension by the policymakers that would argue for an immediate interest rate hike. Comments from Carney last week indicated that the market and central bank had the same thinking on the pace of rate hikes, meaning it may not be a concern.

Earnings have mostly wound down for the second quarter by now. The reports in the coming week are all from retailers. Notables include Home Depot (HD), Target (TGT), Hewlett Packard (HPQ), Lowe's (LOW), and Gap (GPS).

Monday, August 18

US Economics (Time Zone: EST)
 
10:00 NAHB Housing Market Index (Aug) - expected 53, prior 53
11:00 Fed purchasing $950m-$1.15b bonds in 22 to 30-year range
11:30 Treasury to sell $29b 3-month bills and $25b 6-month bills

Global Economics (Time Zone: GMT)

01:30 CNY July Property Prices
09:00 EUR Eurozone Trade Balance
 
Earnings
 
After:
Urban Outfitters (URBN)

Tuesday, August 19

US Economics (Time Zone: EST)
 
08:30 Consumer Price Index YoY (Jul) - expected 2.0%, prior 2.1%
08:30 CPI Ex Food & Energy YoY - exp 1.9%, prior 1.9%
08:30 Housing Starts (Jul) - exp 970K, prior 893K
08:30 Building Permits - exp 1000K, prior 973K
11:00 Fed to purchase $250m-$350m notes in 11-19 year range
11:30 Treasury to sell 4-week bills, $25b 52-week bills

Global Economics (Time Zone: GMT)

03:00 NZD RBNZ 2-Year Inflation Expectations
08:30 GBP CPI

Earnings

Before:
Home Depot (HD)
Dick's Sportings Goods (DKS)
Medtronic (MDT)
TJX (TJX)

Wednesday, August 20

US Economics (Time Zone: EST)

07:00 MBA Mortgage Apps
2:00 FOMC Minutes

Global Economics (Time Zone: GMT)

AUD RBA's Stevens delivers semi-annual testimony
JPY Trade Balance
04:30 JPY All Industry Activity Index
06:00 EUR German PPI
08:30 GBP BoE Minutes

Earnings

Before:
Target (TGT)
PetSmart (PETM)
Hain Celestial (HAIN)
Madison Square Garden (MSG)
 
After:
Hewlett-Packard (HPQ)
L Brands (L)

Lowe's (LOW)
Staples (SPLS)
American Eagle Outfitters (AEO)

Thursday, August 21

US Economics (Time Zone: EST)

08:30 Initial Jobless Claims - exp. 300k, prior 311k
08:30 Continuing Claims - prior 2544k
10:00 Philly Fed - exp 20.0, prior 23.9
10:00 Existing Home Sales - exp 5.00M, prior 5.04M
10:00 Leading Index - exp 0.6%, prior 0.3%
11:00 Fed to purchase $2.05b-$2.5b notes in 7 to 10-year range

Fedspeak

Jackson Hole Fed symposium begins
 
Global Economics (Time Zone: GMT)

Japan Investors Purchases of Foreign Stocks/Bonds
01:00 AUD Consumer Confidence Index
01:35 JPY Manufacturing PMI (Aug prelim)
01:45 CNY HSBC Manufacturing PMI (Aug prelim)
06:00 CHF Trade Balance
07:00 EUR France Manufacturing PMI (Aug prelim)
07:30 EUR German Manufacturing PMI (Aug prelim)
08:00 EUR Eurozone Manufacturing PMI (Aug prelim)
08:30 GBP Retail Sales
08:30 GBP Public Budget
14:00 EUR Eurozone Consumer Confidence (Aug advance)

Earnings
 
After:
Gap (GPS)
Ross Stores (ROST)

Dollar Tree (DLTR)
Aeropostale (ARO)

Friday, August 22

US Economics (Time Zone: EST)

No major reports scheduled

Fedspeak

Jackson Hole Fed symposium begins

Global Economics (Time Zone: GMT)

12:30 CAD CPI

Earnings

No major earnings scheduled

Twitter: @MichaelSedacca

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