Global Economy Week Ahead: Updates on U.S., Chinese Economies, U.K. Rate Decision

Last week, it was the labor report that attracted so many attention. This week’s data from China and US would also be important to judge the movement of the market.

The U.S. and China will lay out key data points this week, giving a snapshot of the world’s top consumer economy and its biggest exporter. In Europe, the focus is on further fallout from the U.K.’s vote to exit the European Union, including a possible rate move by the Bank of England.

WEDNESDAY: China releases its import and export figures. Some economists forecast a year-on-year drop in June of up to 5.5% in exports and 7.2% for imports. In May, exports slid 4.1% and imports decreased 0.4%, expanding China’s trade surplus to $49.98 billion. Beijing officials have worried this year that trade is being used as an unauthorized way of sending capital out of the country.

The same day, the release of the Federal Reserve’s Beige Book will unveil a snapshot of the U.S. economy, with details about local conditions such as the job market, construction investment and banking health. The previous report mentioned tight job markets and wage increases in the offing.

THURSDAY: The Bank of England’s Monetary Policy Committee is expected to cut benchmark interest rates in the U.K. below the current 0.5%, or signal that rate cuts are imminent as the economy staggers under voters’ decision to leave the EU. Gov. Mark Carney has already telegraphed a possible move, saying easier policy was likely on the way this summer.

FRIDAY: June’s U.S. retail sales report from the Commerce Department will show whether healthy consumer spending patterns are continuing through the second quarter. Economists expect the data to be unchanged from May, held down by weak car sales. The previous month, sales rose 0.5%, led by increased spending online and at gas stations. Consumer spending drives about two-thirds of U.S. output. Also, a report on U.S. consumer prices will show whether inflation is returning as oil prices rebound.

Meanwhile, China will release figures on gross domestic product for the second quarter, providing insight into Beijing’s economic balancing act. China is ramping up stimulus to ensure that growth slows gradually and GDP hits 6.5% to 7% for 2016. The consensus among economists is that second-quarter growth will be at or below the first quarter level of 6.7%, already the country’s slowest growth since the global financial crisis.

Leave a Comment