US: Key data for next week - Danske

Next week US economic data includes CPI and FOMC minutes. According to analysts from Danske Bank, the minutes should be very interesting and should reveal more information on triggers for the next rate hike.

Key Quotes:

“In the US we are due to get CPI inflation for July (Tuesday). Core inflation trended higher in late 2015 but has moved sideways in 2016, around 2.3% y/y. This picture should repeat itself in July, when we expect another increase of 2.3% y/y. Although inflation has moved  up, inflation expectations are still low and the Fed is likely to focus more on the strength of the recovery, labour market data and global risks.”

“The minutes from the latest FOMC meeting should be very interesting. The statement from the meeting was a bit more hawkish than expected, with focus on the phrase ‘near-term risks to the economic outlook have diminished’. The minutes should give an indication of how high the bar is for a hike. Our forecast is that the next move from the Fed will not be until June 2017 but risks are skewed towards an earlier hike possibly in December if data stays decent and there are no new global shocks.”

“Otherwise regional business surveys from Empire and Philadelphia will give the first indication of activity in August. We estimate housing starts (Tuesday) fell slightly following  a jump in June. Overall housing activity has moved sideways over the past few quarters.”