Shaping the markets – this week
What will the latest FOMC minutes reveal about the Fed’s tapering intentions?
- This week is expected to be relatively light on data. In the US, minutes from the latest meeting of the Federal Open Market Committee (FOMC) meeting are released on Wednesday. The minutes may provide some insight into how strong the Fed’s conviction is for ‘tapering’ to begin in September. Also on Wednesday, existing home sales are expected to increase modestly to 5.1m in July. On Thursday, analysts expect initial jobless claims may rise to 335,000 for the week ending 17 August. New home sales in July are released on Friday and may dip slightly from 497k in June as mortgage purchase applications have fallen over the month, indicating a decline in signed contracts. The Jackson Hole Economic Symposium takes place between Thursday and Saturday.
- In Europe, further improvements in purchasing managers’ indices (PMI) for France, Germany and the euro area are expected on Thursday. At the end of the week, second estimates of GDP in the UK and Germany should provide some detail on the growth drivers and sustainability of the upturn.
- Japan's July trade balance data was released on Monday. Japanese exports rose 12.2% year-on-year (y-o-y) to July, driven by a weaker yen and a recovery in overseas economies, while imports increased 19.6% y-o-y. On Wednesday, Chinese PMI should provide clues about the severity of the country’s slowdown.