- Monday July 19th 2010 – US NAHB Housing Index (1400 GMT)
The Index is a timely gauge of home sales and expectations for future home building. Based on a small sample of homebuilders, the Housing Market Index is a timely indicator of future US home sales. However, as the index is not as comprehensive as formal housing reports like new home sales or MBA mortgage applications, the index acts more like a supplemental indicator for predicting housing trends. As such, the NAHB Housing Market Index is still able to provide general insight to where the housing market is heading. Given that new home sales reflect ‘big ticket’ items that require construction and investment, the housing market is often viewed as an indicator of the direction of the economy as a whole. Housing has been slowing in the US given the removal of the tax incentive, this will be the first of the housing indexes for the new month.
- Tuesday July 20th 2010 – German (EMU) Producer Prices (600 GMT)
German PPI measures the change in the prices paid by domestic producers. Producer prices, also known as factory gate prices, are those charged by producers usually before retail, consumer markets. Increases in German Producer Prices act as an early indicator of inflation, as higher producer prices may be passed to consumers in the form of higher retail prices. Rising inflation is significant, especially coming from the largest economy in the Euro-zone. This number has been running hot, and the market will need to see a lower number for growth to continue to be sustained.
- Wednesday July 21st 2010 – Bank of Canada Interest Rate Decision
The decision to increase, decreases, or maintain the bank set interest rate. A decision to lower rates can spur economic growth while inciting inflationary pressures, whereas rate increases tend to slow down inflation but stymie growth. The Bank of Canada has an inflation target of one to three percent and they change interest rates accordingly to meet that goal. The Bank of Canada’s rate decision has significant influence on financial markets. Changes in rates have a direct impact on interest rates for consumer loans, mortgages, and bond rates. The BOC issues a statement with every rate announcement. There is a decent likelihood that the BOC will raise interest rates by .25%, to .75%. The recent employment situation in Canada has been very robust, which could eventually cause wage inflation. A move in this rate will cause the Canadian dollar to rally and USD/CAD to decline.
- Thursday July 22nd, 2010 – United Kingdom Retail Sales Report (830 GMT)
The Retail Sales Report measures the change in the volume of sales by retailers in the United Kingdom . The data is gathered by a monthly survey of large retailers and a representative sample of smaller retail businesses. Higher retail sales volume shows stronger consumer demand, higher retail output, and economic growth. The headline is the seasonally adjusted percentage change in Retail Sales volume from the previous quarter and previous year. This will be one of the last reports prior to the GDP report for the UK, and will determine the final second quarter demand for the UK. A strong report will push the Pound above the 1.52 resistance level.
- Thursday July 22nd, 2010 – EMU Consumer Confidence (1400 GMT)
Consumer Confidence measures consumer sentiment in the Euro-zone nations. The figure is the result of Euro-zone consumer surveys personal finance, the job market, the likelihood of saving and expectations on the economy. High levels of consumer confidence bode well for the economy, indicating consumers are more likely to increase consumption spurring growth and potentially sparking inflation. Although credit rating agencies continue to downgrade parts of Europe, the consumer seems to continue to shop and keep the economy above water.
- Friday July 23rd 2010 – United Kingdom GDP (830 GMT)
GDP is an indicator for broad overall growth in the United Kingdom. Robust UK GDP growth signals a heightened level of economic activity, and therefore a high demand for currency. Economic expansion also raises concerns about inflationary pressure, which generally prompts monetary authorities to increase interest rates. This means that positive GDP readings are generally bullish for a given currency, while negative readings are bearish. Expectation are for a small increase, but any negative readings will hurt the Pound significantly.
- Friday July23rd 2010 – Canadian Consumer Price Index (1100 GMT)
The key gauge for inflation in Canada . Simply put, inflation reflects a decline in the purchasing power of the Canadian Dollar, meaning each Dollar buys fewer goods and services. CPI is the most obvious way to measure changes in purchasing power – the report tracks changes in the price of a basket of goods and services that a typical Canadian household might purchase. An increase in the index indicates that it takes more Dollars to purchase this same set of basic consumer items. As the most important indicator of inflation in Canada , Consumer Price figures are closely followed by Canada ‘s central bank. The Bank of Canada has a target inflation band of 1 – 3 % and uses CPI and Core CPI as its principle gauge. A greater than expected release could push the CAD toward par with the USD.