Monthly Change for July
Provided by: Rightmove
Official Release: PDF

Rightmove HPI y/y: -2.0%, pr. 0.1% (June), 2.2% (May), 1.3% (Apr)
Avg. Price: £235,219, pr. £239,564 (June), £242,500 (May), £239,521 (Apr)

Housing prices are declined 1.8% in July, the highest monthly decline measured for this month. Activity in the housing market is grinding to a halt, according to Miles Shipside, commcercial director of Righmove, as unsold property numbers for the year so far rose to the highest Righthouse has indexed. It was also the 6th straight month of rising home inventories. Therefore sellers are reducing prices on the outset instead of testing the market.

The increase in housing inventory came inspite of an approximately 20% reduction in the number of new sellers compared to last year. Shipside compares the situation to the American housing woes:

We are measuring very low levels of new sellers for this time of year, around 20% down on 2007. This has a limiting effect on the supply of unsold property, unlike America where excessive new build and forced sellers have really flooded the market. Price falls in the US market are being driven by rising levels of unemployment and the ‘payment shock’ of fixed rate mortgages resetting to unaffordable interest rates. Both of these factors are affecting the UK market, but so far, not to the same extent. Therefore we do not expect to see falls as large as the worst hit areas of the US.”

Sales y/y: 1.4%
Total Sales: 88, 917

Although the compared to May, there was a 1.0% increase in new vehicle sales, the trend estimate declined 0.4%, continuing a decline that began in January 2008. The annual increase of 1.4% was the slowest in 18 months. 

"Producer and Import Prices" (June)
Provided by: Federal Statistical Office
Official Release: Data (in German)

PPI y/y: 4.5% forecast 4.4%, pr. 3.9%
Producer Prices: m/m 0.5%, y/y 4.4%
Import Prices: m/m 0.8%, y/y 4.7%

The index for Producer and import price eased off May's 1.2%, which was the highest since March 1993.

For May
Provided by: Ministry of Economy, Trade and Industry (METI)
Official Release: Data - PDF

All Industrial Activity Index y/y: -0.5%, pr. 0.3%

The all industrial activity index, a measure of overall production by all sectors of the Japanese economy, rose 0.4% for the May period. This was slower than the pace in April. Industrial output (up 2.8%) was the main positive contributor, on the back of production of cars and mobile phones. Services activity fell 0.2%, as consumers spend less and limit their spending on retail, dining and travel. The annual pace of activity fell 0.5%, showing the slowdown the Japanese economy is undergoing recently.

For June

The Swiss trade surplus rose to a record in June, surprising forecasts. The surplus widened to 2.41 billion francs ($2.37 billion) but as a result of a bigger fall in imports compared to exports. Exports were down 1.8%, while imports declined 2%. Sales to the US are down 8.1% compared to last year, and exports to the UK are down 12% during that time reflecting those economies slowdowns and pullback in demand for foreign goods. Russia, China, and other emerging markets picked up the slack. 

With the surplus coming as a result of lower activity, the better than expected result has to be taken with a grain of salt. 

Provided by: US Treasury
Official Release: Speech  

US Treasury Secratary Paulson said Congress should pass legislation this week that will give him authority to use taxpayer monmey to rescue Fannie Mae and Freddie Mac, the largest source of US mortgage financing. The GSE's (government sponsered enterprises) are a key to the eeconomy and the recovery of the housing market. He also noted that a strong dollar is "very important" to the US's interests.

Monthly Rate for May
Provided by: Statistics Canada
Official Release: News Release

Sales y/y: 2.8%

Retail sales were up 0.4% in May, slower than the pace in April, and slightly below expectations. Sales were up 2.8% compared to a year ago. The report showed that the biggest jump came as a result of sales in the auto sector, largely on a 2.4% increase in gasoline stations sales. Thats a direct result of higher gasoline prices, and doesn't reflect much expansion in the sector. Sales of new vehicles was up 0.3%. Sales of building and outdoor home supplies were another big contributor, climbing 0.7%.

The Loonie fell back to the 1.0050 level against the greenback as the weaker retail sales, strong comments from the Fed's Plosser, and a drop in oil prices worked to pressure the Canadian Dollar.

From the Release: "Retail sales in current dollars rose 0.4% in May to $35.8 billion. This was the seventh increase in eight months. The advance was primarily attributable to increased sales at gasoline stations, largely owing to significantly higher gasoline prices (+8.8%) in May compared with April 2008. If the effects of price changes are removed, retail sales in constant dollars rose by only 0.1%.

Sales in the automotive sector posted a strong 1.1% increase in May, the sixth rise in eight months. Although sales were up in all three components of this sector, the largest sales increase occurred at gasoline stations (+2.4%).

Sales in the building and outdoor home supplies stores sector rose 0.7%, the second increase in eight months. After growing steadily since early 2005, sales in this sector have remained relatively stable since mid-2007.

Among the three sectors where sales did not increase, the most pronounced drop occurred in clothing and accessories stores (-0.7%). The decrease in this sector stemmed from weak sales in clothing stores (-1.1%), while sales at shoe, clothing accessories and jewellery stores rose 0.9% following five consecutive monthly declines."

For July
Latest Release Provided by: Federal Reserve Bank of Richmond

The Richmond Fed Manufacturing Index surprised forecasts on the downside, showing a further deterioration in condition. The index slipped to -16 for the July period, 4 points lower than June's -12. Shipments were down 12 points to -23, new orders moved down 4 points to -17, and capacity utilization fell 6 points to -15.

The release came amid a burst of Dollar buying to start the US session, though those gains were stalled in the 30 minutes after the Richmond survey.  

From the Release: "Manufacturing activity in the central Atlantic region contracted again in July, according to the Richmond Fed’s latest survey. Respondents reported somewhat greater declines in factory shipments and new orders and more moderate weakness in employment. Most other indicators also implied weaker activity. District contacts reported capacity utilization declined further and vendor delivery times reversed the positive reading seen last month. Moreover, manufacturers noted orders backlogs were virtually unchanged and finished goods inventories grew on pace with June.

Looking ahead, manufacturers’ optimism about future business prospects dropped considerably in July. Firms anticipated that growth in shipments, new orders, backlogs, employment, and average workweek would turn negative during the next six months.

Survey assessments of current prices were on par with a month ago. Looking forward, respondents expected price growth to quicken over the next six months."

For 2nd Quarter
Official Release: Australian Bureau of Statistics

CPI y/y: 4.5%, forecast 4.3%, pr. 4.2% (1Q), 3.0% (4Q '07)

RBA Trimmed Mean q/q: 1.2%, forecast 1.1%, pr 1.2% (1Q), 1.0% (4Q)
RBA Trimmed Mean y/y: 4.3%, forecast 4.2%, pr. 4.1% (1Q), 3.4% (4Q)
RBA Weighted Mean q/q: 1.0%, forecast 1.1%, pr. 1.3% (1Q), 1.1% (4Q)
RBA Weighted Mean y/y: 4.0%, forecast 4.4%, pr. 4.4% (1Q), 3.8% (4Q)

Australian inflation rose 1.5% in the 2nd quarter and 4.5% compared to a year ago. Both figures were above forecasts but may not have much effect on expectations for Reserve Bank of Australia Governor Stevens. In last week's minutes, the RBA stated that they expected another high reading for the June quarter, so the outlook for the RBA isn't changed. With domestic growth feeling some strains, the RBA will keep rates constant and try and wait out this recent bout of inflation.

AUS/USD - Aussie Falls As RBA Seen on Sidelines Now: Therefore, despite the higher than expected number, the AUD/USD weakened following the news as Greenback strength carried over from yesterday's NY session. The pair fell to 0.9600 in NY trading on Wednesday. That's 230 pips lower than its 25 year high, set last Tuesday near 0.9850. With the Reserve Bank on the sidelines the Aussie will be weaker against the Dollar if the Fed chooses to start raising rates.

Minutes for meeting held on 9 & 10 July
Provided by: Bank of England
Official Release: PDF

The members of the Monetary Policy Committee surprised expectations and were split 3 ways. Seven members voted to hold rates steady, David Blanchflower called for a reduction, while Timothy Besley voted to increase rates, the first to do so in about a year. Blanchflower sees weak growth ahead and wants to soften borrowing costs while Besley believes higher inflation and the Committee's credibility is at stake if the Bank does not raise rates to battle inflation.

From the Release: "For all members of the Committee, the decision was a difficult one. There was a range of views about the weights to place on different arguments. But all members agreed that, relative to the central projection in the May Inflation Report, the path of inflation in the near term would be higher and the slowdown in activity more pronounced. The discussions and analysis in the forthcoming Inflation Report forecast round would help to shed more light on the implications of these developments for the inflation outlook in the medium term.

For one member, the arguments in favour of raising Bank Rate this month were most telling. While acknowledging the downside risks to activity from the energy shock and credit crunch, an immediate increase in Bank Rate was needed to keep medium-term inflation expectations anchored and ensure the Committee’s credibility in light of the current and prospective increase in CPI inflation.

For another member, the news on the month had reinforced the case for an immediate reduction in Bank Rate in order to avoid inflation undershooting the target in the medium term. The activity data had been uniformly gloomy and broad-based and activity now seemed likely to contract sharply in the near term, possibly for several quarters. Long-term inflation expectations remained contained and domestically generated inflation remained low. As a result, there was little or no likelihood of a rise in wage growth. So it continued to be important to look through the short-term spike in inflation."

Pound Gains on Meeting Minutes: The Pound rose on the back of the meeting minutes, even as two pieces of fundamental data were weak. The GBP/USD jumped 100 pips during the European trading session, reclaiming some of its losses yesterday.

EUR/GBP - Pouns Surges 80 Pips vs Euro on Central Bank Outlook: With the Euro weaker and the Pound stronger, the Euro-Pound pair slid 80 pips to test 0.7850. This is a 5-week low for the pair, as it broke below key resistance of 0.79.

For May - (s.a.)
Provided by: EuroStat
Official Release: PDF

Industrial New Orders y/y: -4.4%, forecast 3.2%, pr 12.3% (Apr), -3.7% (Mar)

Euro-zone industrial orders disappointed forecasts for the May period, falling 3.5%. The consensus forecast was for a drop of 1.3%. The figure reverses all of April's 2% gain. European exports are facing weaker demand from the US and the UK, and European companies face higher operating costs and consumers faced with rising inflation. GDP growth is expected to be weaker in 2nd quarter as manufacturing activity contracts in the face of higher costs, mainly oil and energy, and weakening foreign demand.

From the Release: "In May 2008 compared with April 2008, new orders for chemicals & chemical products fell by 0.5% in both the euro area and the EU27. Manufacturing of basic metals & fabricated metal products decreased by 2.4% and 1.9% respectively. Electrical & electronic equipment dropped by 3.0% in the euro area and by 4.5% in the EU27. Manufacturing of machinery & equipment declined by 4.1% and 7.7% respectively. Textiles & textile products fell by 4.2% in the euro area and by 1.7% in the EU27. Transport equipment decreased by 7.0% and 8.5% respectively."

EUR/USD - Greenback Gains for Second Day: The Euro was lower against the Dollar overnight, falling to test the area near 1.5720 following the release. After the NY open the the Euro fell further to breach 1.57. European stocks gained overnight and the EUR/JPY pair tested 169.70 overnight, but gave up its gains in NY morning trading.

For June
Provided by: StatCan
Official Release: News Release

CPI y/y: 3.1%, forecast 2.9%, pr. 2.2% (May), 1.7% (Apr)
BOC Core CPI m/m: 0.1%, forecast 0.1%, pr. 0.3% (May), 0.3% (Apr)
BOC Core CPI y/y: 1.5%, forecast 1.6%, pr. 1.5% (May), 1.5% (Apr)

The annual inflation rate jumped to 3.1% in June, from May's 2.2%. The gains were primarily pushed up by gasoline prices, which reinforces the retail sales data which showed Canadians spending more to drive. On a monthly basis, prices rose 0.7% from May to June, cooler than May's 1.0%, but higher than forecasts of a 0.5% change. The core rate was only up 0.1%, as energy is up 4.4% on the month and 18% on the year. Such high gas prices will cause consumers to limit spending on other goods, possibly weakening the economy.

From the Release: "Fueled by higher gasoline prices, consumer prices rose 3.1% in the 12-months ending June 2008, compared with the 2.2% gain recorded in May. June's increase was the largest since September 2005. Consumer prices excluding gasoline rose 1.8% in the 12 months to June.

Gasoline prices increased 26.9% between June 2007 and June 2008, significantly higher than the 15.0% advance posted in May. June's increase was the largest since the 34.7% gain reported for September 2005, when hurricanes Katrina and Rita disrupted the oil market.

June's increase reflected both recent increases in pump prices, as well as the fact that gasoline prices had been on the decline in June 2007. In addition to gasoline prices, mortgage interest cost, bakery products and air transportation also exerted strong upward pressure on the Consumer Price Index (CPI) in June."

USD/CAD - Greenback Strength Matches Loonie's Boost From CPI Data: The USD/CAD saw some Loonie strength following the CPI data but it stalled near 1.0060, and the greenback recovered back above the 1.01 level.

Provided by: Reserve Bank of New Zealand
Official Release: Statement

The Reserve Bank of New Zealand surprised economists and traders and lowered rates by a quarter point, causing a quick knee-jerk reaction of Kiwi selling. The NZD/USD fell almost 80 pips in the minutes following the release, testing 0.7415. The NZD/JPY plunged 100 pips to set a low near 80.00 in the minutes following the release.

From the Release: "The Reserve Bank today reduced the Official Cash Rate (OCR) from 8.25 percent to 8.0 percent.

Reserve Bank Governor Alan Bollard commented that “more unpleasant international news has emerged since the June Monetary Policy Statement, and there is a risk that the domestic economy will slow further. Moreover, the cost of funds raised abroad by banks has been rising in recent months as the international financial situation has deteriorated. Today’s cut will help to mitigate the effect of these increases on the actual borrowing costs paid by firms and households.

“Recent oil and food price increases mean that annual CPI inflation should peak around 5 percent in the September quarter of this year. However, we expect that inflation will return inside the target band in the medium term. The weaker economy is expected to reduce pressure on resources, making it more difficult for firms to pass on costs and for higher wage claims to be agreed.

“Economic activity is likely to remain weak over the remainder of 2008. The ongoing correction in the housing market, together with the very high oil prices, will limit household spending and constrain the extent of recovery. However, high export prices and an expansionary fiscal policy are expected to contribute to a gradual pickup in activity through 2009.

“Consistent with the Policy Targets Agreement, the Bank’s focus will remain on medium-term inflation. In this regard, it is important to note that monetary policy has been reasonably tight for some time, and is now restraining activity and medium-term inflation pressures. Provided that the outlook for inflation continues to improve and there is no excessive exchange rate depreciation, we would expect to lower the OCR further.”

Advance Estimate for July

Activity in the manufacturing sector in Germany took a step back in July, falling from 52.6 to 50.9, below expectations. The number is still above the 50 level seperating expansion from contraction, but indicates growing concern that the Euro-zone is slowing. Activity in the services sector picked up, a trend not seen in the rest of the Euro-area. 

Preliminary Version for July

Germany: pr. 52.6 (Jun), 53.6 (May)
France: pr. 49.2 (Jun), 51.5 (May)
Italy: pr. 46.9 (Jun), 48.0 (May)
Spain: pr. 40.6 (Jun), 43.8 (May)

Activity in the manufacturing sector declined sharply in July, falling to 47.5 from June's 49.2, according to preliminary data. Manufacturing is being pressured by weaker global demand, and lowers domestic sales as companies and consumer curtail spending. Producers are being forced to raise prices as a result of higher input costs, mainly any derivatives of oil and energy. Activity in services was down as well, and a third release today showed German business confidence falling to its lowest in 2001. 

For July
Latest Release Provided by: IFO Institute of Economic Research
Official Release: PDF

Expectations Index: 90.0, forecast 93.2, pr. 94.7, 97.3 (May), 96.8 (Apr)
Current Conditions: 105.7, forecast 106.5, pr. 108.3, 110.1 (May), 108.4 (Apr)

Business confidence in Germany took a plunge in July with the overall index declining almost 4 points to 97.5 from June's 101.3. Current conditions and future expectations both deteriorated and the overall reading was the lowest in 3 years. The decline was far below expectations. With the ECB raising rates at a time when firms are already pressured by higher costs due to surging oil, and weaker demand for goods from abroad and domestically, the situation looks to be pointing to weak growth for the second half of the 2nd quarter and perhaps into the 3rd quarter. The ECB may be even forced to revise its growth projections for 2008 as manufacturing and services cool more than expected as well. Below is the summary from the IFO.

The Euro was weaker for a third day against the Dollar, though its decline was tempered overnight, prior to the NY open.

From the Release: "The Ifo Business Climate Index for industry and trade in Germany has fallen again significantly in July following a clear worsening in the previous month. The firms are much more dissatisfied with their current business situation and they are clearly more reserved regarding the six-month outlook. These results suggest that the economic upswing is coming to an end.

In manufacturing the business climate index has fallen noticeably. Satisfaction with the current business situation has declined among the survey participants. They also anticipate weaker business in the coming six months. Export business will no longer expand so rapidly, in the estimation of the manufacturers. Their willingness to take on additional staff has weakened somewhat.

In the other three survey sectors - construction, retailing and wholesaling - the business climate index is clearly trending downwards. In both trade sectors, wholesaling and retailing, the business climate index has fallen significantly. The trading firms have assessed both their current business situation as well as the six-month outlook clearly more pessimistically than in June. In construction the business climate has clouded somewhat. The current business situation has been assessed more unfavourably and the business expectations are more cautious than in the previous month. "

For May (s.a.)
Provided by: European Central Bank
Official Release: Press Release

Current Account (n.s.a.): -21.4B, pr. -9.2B (Apr), -5.7B (Mar), 8.1B (Feb)

From the Release: "The working day and seasonally adjusted current account of the euro area recorded a deficit of EUR 7.3 billion in May 2008 (corresponding to a deficit of EUR 21.4 billion in non-adjusted terms). This reflected deficits in current transfers (EUR 5.9 billion) and goods (EUR 3.3 billion), which were partly offset by a surplus in services (EUR 2.7 billion). The income account was close to balance."

For Week Ending July 19th
Latest Release Provided by: The Department of Labor

4-Week Moving Average (Jul 19): 382,500 pr. 376,500, 381,000, 390,500
Continuing Claims (Jul 12): 3.1M, forecast 3.2M, pr, 3.12M, 3.2M, 3.11M, 3.139M

The increase in numbers of those claiming unemployment in the past week was worse than feared, and matched the highest level since September 2005. This points to another poor showing by the Non-Farm Payroll employment report next week. Data this week showed