Over the coming days, South Africa will release unemployment, money supply, credit extension and trade figures.
Policymakers at America’s central bank will announce their latest rates decisions. Europe will update on inflation and confidence. Japan will conduct its monthly data dump and China will release an official forward-looking measure of the country’s manufacturing prospects. Here is your guide.
Statistics South Africa (Stats SA) will report second quarter labour force statistics on Tuesday. South Africa’s official unemployment rate rose from 24.1% in the fourth quarter of 2013 to 25.2% in the first quarter of 2014. Economists do not expect these grim figures to have improved in the second quarter of the year.
On Thursday, the South African Reserve Bank (SARB) will report June’s money supply and private sector credit extension (PSCE) growth figures, Stats SA will release June’s producer price index and the South African Revenue Service will print June’s trade figures.
No meaningful slowdown in money supply or credit growth followed the SARB’s 50-basis point rise to the country’s benchmark repo rate in January through May and consensus is that the trend continued in June. Consensus is also that M3 money supply – the broadest measure of money – grew 7.5% from a year earlier in June, down from 7.6% in May, and PSCE expanded 8.0% year on year, down from 8.3% previously.
Closing out South Africa’s week on Friday, the National Association of Automobile Manufacturers of South Africa will report July’s new vehicle sales. Given the overall weak state of South Africa’s economy, and the effects of recent work stoppages, analysts expect another negative year-on-year report.
Elsewhere on the continent, this week’s economic calendar is particularly light. Policymakers at Angola’s central bank will announce their latest rates decision on Monday. Later in the week, markets expect Kenya, Morocco and Namibia to release June money supply figures and Zambia to report its July consumer price index figures.
There are two big events on America’s economic calendar this week: Wednesday’s policy announcement from the Federal Reserve and Friday’s monthly payrolls report.
In the run-up to Wednesday’s rates and broader policy pronouncements from the world’s most powerful central bank, markets will keep an eye on the National Association of Realtors’ pending home sales data, the Dallas Federal Reserve Bank’s regional manufacturing gauge on Monday and Conference Board’s consumer confidence index on Tuesday.
Following this info, the Fed’s Wednesday announcement is unlikely to create any drama. Economists and investors widely expect officials to maintain rates at current levels. Fed Chair Janet Yellen recently testified before the US Congress that she and her colleagues will keep interest rates low for a “considerable period”.
Wednesday will also see the release of America’s latest growth figures. Economists surveyed by Bloomberg expect the Commerce Department’s figures to show that the world’s largest economy expanded at a 3% annualised rate in the second quarter, largely as a result of an uptick in corporate investment, a quickened pace of inventory building and an uptick in home construction.
Friday’s nonfarm payrolls report is likely to show that employers added 233 000 positions in July &ndash down from 288 000 in June &ndash and that the country’s unemployment rate held steady at 6.1%.
A separate report from the Bureau of Economic Analysis and Commerce Department – also slated for release on Friday – will probably show that Americans’ personal income rose 0.4% and that consumer spending rose by the same rate in June.
On Monday, Italy’s Institute for Economic Studies and Analyses (ISAE) will release the first of this week’s European economic sentiment gauges. Markets expect the ISAE’s business sentiment index to remain largely unchanged, possibly rising from 100.0 to 100.2.
On Wednesday, attention will shift to consumer confidence figures from France’s National Institute of Statistics and Economic Studies and to the eurozone’s latest business climate, consumer sentiment, economic sentiment and industrial sentiment indices. Amidst continued worries over the situation in Ukraine and the continent’s general economic malaise, no improvement in opinion is expected in this month’s releases.
On Thursday, the eurozone’s latest inflation and employment data will take centre stage.
Economists expect the region’s harmonised index of consumer prices to have ticked-up a mere 0.4% to 0.5% from a year earlier in July. This would mark the tenth consecutive month in which inflation remained well below the European Central Bank’s target of around 2.0% growth.
Eurostat, Europe’s statistics agency, is expected to report that the region’s unemployment remained stubbornly high at 11.6%. The overall figure masks a sharp divergence between northern and southern Europe. In the former, labour market conditions have shown steady improvement. In the latter, the situation remains dire, particularly for youth.
Finally, Friday is manufacturing purchasing managers’ index day. Ireland, Russia, Sweden, Hungary, Norway, Turkey, Spain, the Czech Republic, Italy, France, Germany and Greece will report these forward looking indicators of economic activity along with the eurozone as whole.
Japanese economic data will feature prominently over the coming days. Officials will release household spending, retail sales and unemployment data on Tuesday, industrial production figures on Wednesday and housing starts on Thursday.
Economists surveyed by Market News International expect household spending to have fallen for a third consecutive month in June, albeit at a smaller rate than the declines observed in May and April, as the dampening effects of April’s consumption tax increase dissipate. The median forecast calls for a 4% pullback from a year earlier, an improvement on May’s 8% year-on-year decline.
Retail sales also likely fell, by 0.5% from a year earlier, largely as a result of continued weakness in demand for durable goods. The country’s unemployment probably remained unchanged at 3.5%, its lowest level since 1997.
Industrial output likely fell 1.2% from May to June – marking the first decline in two months – largely as a result of diminishing automotive and electronic production. If the consensus estimate proves accurate, Japan’s production in the April to June quarter will have fallen 3.1% from the preceding three months, marking the first quarterly decline in two and a half years.
June housing starts may have fallen 11.3% from a year earlier to a seasonally adjusted annualised rate of 867 000 units. Again, April’s tax hike explains the decline.
At the close of the week, attention will shift to China’s official manufacturing purchasing managers’ index release. Markets are optimistic after a similar factory gauge released by HSBC/Markit last week rose to an 18-month high.