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What to Watch - Week of 15 July 2024

It’s all about jobs locally in the week ahead, with forecasts for the Australian economy to have added 25k jobs in the month with NAB tipping a stable unemployment rate of 4% but won’t be surprised by a 4.1% number. In the US, Fed speak, as markets continue to digest that soft CPI print. Around the globe, the ECB meets (hold), UK CPI and retail sales data plus China’s Q2 GDP hits the wires.
NAB Markets Research
15 July 2024
Created by potrace 1.15, written by Peter Selinger 2001-2017 3 min read

Taylor Nugent | Markets Research

Past Week

  • In this article we highlight a recent speech by BoE Chief Economist Pill on inflation persistence and central bank frameworks, which may have some relevance for how the RBA may interpret Q2 CPI on 31 July
  • Key will be judging whether inflation persistence is due to decaying second round effects in which greater faith can be placed in forecasts seeing inflation back to target, or whether persistence reflects a more permanent change to price, wage and margin setting behaviour

Comment

  • A very quiet week domestically with only the NAB Business Survey and the W-MI Consumer Survey of note
  • Offshore, the most important piece of data was US CPI for June which came in cooler than expected. A September rate cut is now fully priced and there is now a cumulative 62bps of cuts priced by the end of the year
  • Across the Ditch, the RBNZ while keeping rates on hold, signalled a pronounced shift in the way they are viewing the economy. Our BNZ colleagues shifted their RBNZ rate cut call to Nov 2024 (from Feb 2025)

Week ahead

  • For Australian Employment (Thursday), we pencil in stable unemployment at 4.0% on a 25k employment gain but wouldn’t be surprised by 4.1%. (Consensus +20/4.1)
  • BNZ looks for 0.6% q/q in NZ Q2 CPI (Wednesday)
  • In the US, an interview with Fed Chair Powell Monday is among ample opportunity to hear FOMC participants reaction to the low CPI data
  • US Retail Sales is Thursday, the Beige Book is Wednesday, while the Republican National Convention and Earnings will also garner attention.
  • The ECB is seen on hold on Thursday
  • UK CPI (Wednesday), employment and wages (Thursday) and Retail Sales (Friday) could move the needle on the close-run 1 August BoE decision
  • China Q2 GDP (Monday) should show a slowdown from Q1, while expectations are low from the Third Plenum (Monday through Thursday)
  • Japan (Friday) and Canada (Wednesday) also get June CPI data.

View the full report here

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