FXStreet (Guatemala) - Analysts at Rabobank explained the week ahead.

Key quotes:

“Final Japanese industrial production, and it remains a heavily Asia-centric day, data-wise. We also have Indian CPI, expected to decline from 8.3% to 7.7%, which the market will receive very happily if so given it suggests the RBI is on track to meet its inflation target (weather permitting, of course)”.

China may also release its key aggregate financing data today, but it is due any time by tomorrow. The expectation is for CNY1,425bn, up from CNY1,405bn last month, and compared to CNY1,038bn in the same month last year. In short, it will suggest the credit impulse in China is swinging strongly towards positive territory again due to overt and covert stimulus measures. That backs GDP growth stabilizing around the 7.5% line in the sand that the government has drawn – but it does nothing to suggest the worrying increase in debt levels is being dealt with. After all, that data point alone would mean China added around USD230 of new debt in just the month of June”.

“Tuesday has the RBA’s July meeting minutes, which will be looked at carefully for any slight shift in stance, UK CPI and PPI, and the German ZEW survey. In the US there are retail sales, while Fed Chair Yellen gives the first of her semi-annual testimonies to Congress – expect market focus on the Q&A in particular (notably Plosser has just argued a rate hike is close than we might think). The BOJ also release their monetary policy statement”.

“Wednesday has Chinese investment, retail sales, industrial production, and Q2 GDP data. We then get UK unemployment data, US PPI, industrial production, and the NAHB housing survey, and the second Yellen testimony. Fisher (Richard) speaks on monetary policy shortly afterwards (will the messages match given he is a hawk), and we then see the Fed’s Beige Book to get yet another view of the FOMC’s reading on the economy”.

“Thursday has US initial claims, housing starts, and building permits, as well as the Philly Fed survey, with the Fed’s Bullard also speaking”.

“Friday ends on a quiet note with Chinese property prices, the ECB’s Weidmann speaking, and the US Michigan confidence survey”.

“Sunday is the deadline for the US and Iran to strike a nuclear deal. That presents some degree of political risk for markets, but given that we are already shrugging off open civil war in Iraq and Syria, along with fighting between Gaza and Israel, the likelihood of a major market impact seems low”.

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