Highlight of The Week’s Major Fundamental Releases

The USD experienced a lot of volatility last week with the summer bringing in some turbulence for the currency. Market volatility will not be slowing this week as major releases on queue for the week like the UK, Australia and New Zealand Employment data, US and UK Inflation releases, and the Fed’s minutes will spur a lot of traffic in the market.

The US received a fairly good week with some good data and some disappointing releases like the PPI, Core PPI and the retail sales. After US Consumers failed to spend as much as analysts had anticipated and a slowing was also reported in Consumer Confidence.

With the latest data from CME Group’s FedWatch Tool, hopes for a rate hike anytime soon has been largely reduced, but let’s look at some of the major fundamental releases that will affect the market this week.

German Zew Economic Sentiment

Scheduled for Tuesday, at 9:00. The German investor sentiment declined sharply in July to -6.8 points from the 19.2 reported in June. This was the lowest level since November 2012. The reading was far below the 8.2 points forecasted by analysts. The economic and political uncertainty following the U.K.’s decision to leave the European Union was the primary reason for this slump. Responders were concerned about the export prospects and the stability of the European banking. The ZEW’s indicator of economic sentiment for the euro zone had slipped greatly by 34.9 points to a reading of -14.7 points. German investor moral is expected to reach 2.1 in July.

US CPI

Scheduled for Tuesday, at 12:30. The U.S. consumer prices previously rose for a fourth straight month in June amid higher costs for housing, gasoline, and health care, indicating steadily rising inflation pressures. Consumer Price Index rose 0.2% in June after a similar rise in the prior month. On a yearly base, CPI advanced 1.0% In the 12 months through June. Economists expected CPI to rise 0.3% on the month and 1.1% increase from a year ago. The Fed has refrained from raising interest rates mainly due to persistently low inflation. The current inflation rate is 1.6%, still below the 2% inflation target. US inflation is expected to remain flat in July.

Japanese GDP data

Due Today, at 23:50. The preliminary GDP release showed Japan has dodged a recession with a quarterly gain of 0.4% in the first three months of 2016. The annualized growth showed a 1.7% rise in the first quarter. The rise occurred after a 0.3% contraction in the last quarter of 2015. Stronger consumer spending boosted growth. The positive GDP reading may resurface the BOJ plans to raise Japan’s consumption tax again. However Japan’s economy still struggles with the strong yen hurting corporate earnings, wages consumer confidence. Abe’s growth plan did not prove effective in the years following his election. Despite stronger consumer demand, GDP figures suggested the BOJ’s rate policy was having little impact on the economy. GDP growth in the second quarter is expected to be 0.2%.

UK Inflation Data

Scheduled for Tuesday, at 8:30. The UK’s consumer prices climbed higher in June by 0.5% after posting indifferent rates for the previous months. An increase in air fares, growing cost of driving and more expensive computer games pushed up the cost of living. On the trail of the Brexit vote and the rally in commodity prices, analysts expect inflation to reach the official 2% target during 2017. UK CPI forecast for July is expected to be 0.5%.

US Building Permits

Due on Tuesday, at 12:30. US building permits were higher in June, maintaining a strong footing to close the second quarter. Building permits rose 1.5% to a seasonally adjusted annual pace of 1.153 million units after two months of consecutive decrease. Furthermore, Housing stats also climbed in June, growing by 4.8% to a seasonally adjusted annual rate of 1.189 million units, after a downwardly revised 1.14 million-unit pace reported in May. The strengthening labour market has bolstered growth in the housing market, but home building is being weakened by labour and land unavailability. A 1.16 million-unit pace rise is anticipated for the number of building permits.

NZ Employment data

Due on Tuesday, at 22:45. New Zealand’s employment market has improved in the first quarter despite a 1.2% rise in job creation from the fourth quarter. Economists expected a lower growth rate of 0.6%. Meanwhile, the jobless rate edged up to 5.7% from 5.4% since more people joined the labour force. The participation rate grew at the fastest rate in over 11 years. Economists believe the employment market still has a spare capacity. However, wages remain pinned down due to record immigration, making it easier for employers to fill positions without raising wages. New Zealand’s job market is expected a gain of 0.6% in the second quarter while the unemployment rate is forecasted to decline to 5.3%.

US Crude Oil Inventories

Due on Wednesday, at 14:30. US Crude inventories grew by 1.1 million barrels last week despite analysts anticipating a 1.3 million barrels decline. Economists fear that a continued increase in stocks may result in a renewed fall of oil prices. For more than two years, strong oil production from the Organization of the Petroleum Exporting Countries and those outside the bloc created large inventories, causing prices to plunge below $30 a barrel earlier this year. Since then, production has stabilized and prices rebounded. However, with the current rally in oil inventories, things could take a turn for the worst.