· US data is set to remain in focus as participants continue to try to gauge the possibility of a September rate lift off
· Key data out of the Eurozone this week includes Q2 GDP as well as German ZEW
This week’s tier one data out of the US includes Retail Sales (Exp. 0.4%) , JOLTS (Prev. 5363) and Industrial Production (Exp. 0.3%) after Friday’s nonfarm payroll report failed to shed any further light on the possibility of a September rate-lift off from the Fed. The US jobs report showed a reading of 215k, which was lower than expectation (225k) but higher than the 200k threshold which is considered by some participants to be held as important by the FOMC. This means that this week’s data will continue to hold increased significance, with CME Fed Watch suggesting that the market is currently pricing in a 38% chance of a rate hike in September and therefore still seeing December as the more likely date. Analysts at Nordea Bank suggesting that the Retail Sales data is likely to see focus fall on control sales, which are considered relevant for GDP readings and exclude gasoline, building materials and auto sales. Of the other notable data out of the US, it is possible that JOLTS will also fall into the spotlight, with the data considered to be an important part of the Fed’s assessment of the labour market.
Across the Atlantic, the key European data points include Eurozone GDP (Exp. 0.4%) and German ZEW survey expectations (Exp. 30) . While it is possible that the Greek saga may have negatively impacted Q2’s GDP reading, the recent weakness in EUR along with the ECB’s QE programme and low oil prices may all have outweighed the Greek downside to see some growth throughout the Eurozone, with the number expected to be in positive territory.