major economic data releases for the upcoming week will start from China on Monday, which include july inflation data and M2 money supply.
on the CPI side markets expect a decline from 1.1% in June to 0.8% in July on a year over year basis. the main reasons behind the slowdown in inflation are the base effect from previous year uptick in the CPI , the second thing is the ease in price pressures as reported early in the Caixin China General Manufacturing PMI report for July, which stated that “The latest survey data saw inflationary pressures soften. Input prices rose
at the weakest rate since November 2020,”
in terms of M2 money supply, the PBOC is adding liquidity in the market at an annual rate of around 8.6%, nearly the lowest level in history. markets expect slight uptick in M2 on a year on year basis but the levels remain generally low.
in the U.S, investors will keep close eye on CPI data on Wednesday as its expected to be a strong market mover, the main consensus for inflation is to stabilize around 5.4% to 5.3% in July.
on Friday the University of Michigan will publish its preliminary consumer sentiment report for august where no big changes are expected to take place and the index is seen to remain around 81, far bellow pre-COVID levels at 100.
on Tuesday the ZEW institute will publish its Economic Sentiment index for euro area and Germany, the index has already signaled a slowdown in economic activity in July with a decline from 79.8 to 63.3 in Germany and from 81,3 to 61.2 in the eurozone. the index has reached its peak in may at around 84, levels unseen since 2000 for Germany and never reached in the euro area history. the slowdown in economic sentiment in expected to persist through august results as the number of Delta cases continues to increase across Europe.
Industrial production statistics will be released on Thursday, the annual rate of change is highly expected to decline from its last reading of 20.6% in May as the base effect of past year decline starts to unwind and production rates are declining back to normal.