The biggest impact on the calendar this week would be Jerome Powell’s speech on Friday (26 Aug) which will signal a future US monetary policy direction. Many expected US central bank had already solved the inflation problems as the Federal Reserve (Fed) showed signs of slowing down its pace from 50bps last year to 25bps and later one pause in June. Many major indices went up in response until last month, seeing S&P 500 Index hitting a year high in July. However, many forecasts on to be published data this week showed a mixed direction from slightly in red to unchanged.
If inflation has a cooldown direction and the economics has recovered, the US housing number is expected to go up as people have more money to spend on their home. Still, many indicators forecast a slight change or unchanged data compared to previous month, such as the existing home sales in July, which will be published on Tuesday (22 Aug). The forecast predicted 4.15 million, slightly down from 4.16 million the previous month.
The new home sales and housing permits are expected to be published on Wednesdays (23 Aug) forecasted at 701 million and 1.442 million, respectively, compared to 697 million and 1.441 million from last month as the main price of US home material, the lumber future swung up to $590 in first half of July and dropped down to $490 in the second half, which implied housing demand.
On the same day also, The S&P PMI or Purchasing Manager Index survey is also expected to go down to 52 from over 53 – 54 level in previous months. Normally the index above 50 signals a good US economy and vice versa.
The weekly crude oil inventories from Energy Information Administration’s (EIA) are estimated at -2.299 million compared to -5.960 million last week, which indicates lower demand on oil and slowdown in economic activity. Meanwhile, the WTI crude oil price bounced back to $82 level again on Monday morning.
Another key indicator drops on Thursday (24 Aug) as the weekly initial jobless claims are to stay the same at 240,000. MoM core durable goods order is also expected to go lower on the same day at 0.2% from 0.6% last month. This number use to gauged the manufacturing activity excluded volatile transportations cost especially from plane.
Lastly, the big Friday, the Germany GDP is expected to almost no change at 0% QoQ and -0.2% YoY, implying no growth from the main gear of EU economy. With both US Fed chairman, Powell and the president of EU central bank, Christine Lagarde scheduled to speak on the same day, markets could move either way if anything about the rate hike are to be mentioned.