Provided by: Reserve Bank of Australia
Official Release: Statement

With several forces aligning to produce a "significant moderation in the domestic economy" the central bank sees "scope to move to a less restrictive monetary policy."

From the Release: "Inflation in Australia has remained high in the recent period against a background of tight capacity and earlier strong growth in demand. In these circumstances, the Board has been seeking to restrain demand in order to reduce inflation over time.

Recent indications are that a significant moderation in domestic demand is now occurring. In addition to the effects of tighter financial conditions, other factors including a slowing in global growth, declining asset markets and higher fuel costs are acting to restrain domestic spending and activity. At the same time, high global commodity prices are adding to Australia’s terms of trade, and this is providing a significant countervailing influence. Prospects for growth of the Australian economy and for inflation will continue to depend on the net effects flowing from these opposing forces...

In its recent policy deliberations, the Board has focused on both the risk that inflation may remain uncomfortably high, and on the accumulating evidence of a slowing in domestic demand and activity. Given the earlier background of strong growth in domestic spending and increasing pressure on productive capacity, the Board has for some time been seeking to restrain demand, and this has required a period of quite restrictive monetary policy. The evidence to date is that a significant moderation in demand is now occurring, and it is looking more likely that demand will remain subdued, and economic growth will be fairly slow, in the period ahead.

While inflation is likely to remain high in the short term, the Board judged at its August meeting that demand was slowing to an extent that could be expected to bring about a significant reduction in inflation over time. On this basis the Board decided that the existing monetary policy setting was appropriate for the time being. On the assumption that the subdued demand conditions are likely to continue, scope to move to a less restrictive monetary policy stance in the period ahead is increasing. The Board will continue to monitor developments and make adjustments as required in order to promote sustainable growth consistent with the medium-term inflation target of 2–3 per cent."

Preliminary Measure for June
Provided by: Cabinet Office

Machinery tool orders took a significant step backwards in June, declining 8.9% on the year. In May, orders were down 2.5%. Domestic orders were down 10.3% y/y, and foreign orders lost 7.9% compared to the previous month 2.7% decline. Manufacturing will continue suffering if companies limit their investment in machinery tools. They may do so if they see weak sales ahead.

PPI Input y/y: 30.1%, forecast 29.8%, pr. 30.8%(r+) (Jun), 28.7% (May)
PPI Output y/y: 10.2%, forecast 10.3%, pr. 10.0% (Jun), 9.3%(Apr)

Output prices rose 0.4% on the month, reflecting a rise in petro and chemical products. Core output prices rose 6.7% on the year, and 0.3% on the month. Although there was an easing of input prices in July, the annual pace of 30.1% is the highest on record. Core input prices rose 16.6% on the year and 0.4% on the month.

Visible Trade Balance for June
Latest Release Provided by: National Statistics Office
May's Release: PDF

Total Trade Bal.: -£4.41B, forecast -£4.2B, pr. -£4.25B (May), -£4.3B, -£4.03B

The UK trade deficit widened to £7.7 billion in June, larger than forecasts. Imports increased by £1.2 billion outpacing a rise in exports of £0.9 billion. The deficit with non-EU countries grew to £4.7 billion from £4.0 billion in May. The deficit with EU countries diminished, falling to £2.9 billion from £3.4 billion.

For June
Provided by: Statistics Canada
Previous Release: News Release

HPI y/y: 3.5% pr. 4.1% (May), 5.2% (Apr), 6.1% (Mar)

The softening housing market since September of 2006 in Western Canada is a real drag to house prices according to Statistics Canada.  The annual pace of 3.5% between June 2007 and June 2008 is the slowest growth since March 2002. Comparing some regional differences, StatCan reported:

Homebuyers in the census metropolitan area of Regina continued to experience the largest gains in new home prices. Contractors' prices in Regina increased by 28.5% from June 2007, with continuing labour shortages and increased costs of materials likely playing important roles.

In British Columbia, year-over-year prices in Vancouver were up 1.8%, while those in Victoria declined by 0.4%.

For July
Provided by: Royal Institute of Chartered Surveyors (RICS)
Official Release: Press Release
Official Release: PDF

From the Release: "The average number of transactions per surveyor fell further in July as a lack of mortgage finance continued to weigh heavily on the market. However, sales expectations have improved, driven by sellers beginning to offer more realistic asking prices.

The RICS house price balance improved slightly for the third consecutive month but still remains at a significantly low level. 83.9 percent more Chartered Surveyors reported a fall than a rise in house prices, a decrease from 86.9 percent in June.

The inability of many to secure mortgage finance is reflected in the collapse in transactions. The average number of transactions per surveyor (over the last three months) is now at 14.4, the lowest figure since the survey began and the net balance of newly agreed sales remains in negative territory.

Demand remains weak with the balance of surveyors reporting new buyer enquiries still at a low ebb. Last month, new buyer enquiries improved again with 27 percent more Chartered Surveyors reporting a fall than a rise compared to 35 percent in June and 50 percent in May.

In June, surveyors reported that ‘predatory buyers’ were bargain hunting for property. This month, surveyors report that ‘realism’ has returned to the market with many sellers dropping asking prices to more realistic levels."

For July
Provided by: National Australian Bank
Official Release: PDF

Bus. Conditions: -5, pr. 0 (Jun), 7 (May), 7 (Apr), 7 (Mar), 11 (Feb), 13 (Jan)

The National Australian Bank (NAB) Survey of business conditions slumped again in July, falling 5 points to -5. That continues a clear trend since January of falling conditions. Business confidence stayed at a lowly -9. The slowdown that has gripped the country and caused the Reserve Bank of Australia to take a dovish approach continues through July. With activity cooling it may finally put the brakes on inflation which has been fueled by rising energy costs but also an economy roaring due to its commodity exports. The report suggests the RBA will cut 50 basis points before the end of 2008 and 125 points over the next year.

From the Release: "Business conditions sharply lower again in July – and rapidly approaching 2001 lows.

• Implying demand growth has already slowed to near (or below) 1% on an annualised basis.
• Forward orders continue to deteriorate and confidence remains at 1991 levels.
• Capacity utilisation again sharply lower & labour market deteriorates as intentions weaken.
• Wages growth a touch higher but sharply higher purchase costs push inflation higher.
• Global and local GDP forecasts unchanged – at 2¾% and 2¼% respectively in 2009, but downside risks build. Speed of local slowing unexpected and somewhat unnerving.
• RBA focus turns to redressing overly tight policy. Rate cuts brought forward. Nab expects at least 50 points before end 2008 and at least 125 points over the next year."
  

Final version for June
Latest Release Provided by Ministry of Economy, Trade and Industry

Industrial Production y/y: 0.0%, pr. 0.2% (Jun-p), 1.1% (May), 1.8% (Apr)

The final version of industrial production for June, showed a larger than initially estimated deterioration in output. On the month output was down 2.2% compared to an initially estimated 2.0% drop. Output had grown 2.8% in May on a monthly basis. Compared to a year ago, output was also lower than the preliminary release decreasing from 0.2% to 0.0% or no growth. Shipments were down while inventories increased.

For July
Provided by: Office of National Statistics

Core CPI y/y: 1.9%, forecast 1.7%, pr. 1.6% (Jun), 1.5% (May), 1.4% (Apr)
CPI m/m: 0.0%, forecast -0.2%, pr. 0.7% (Jun), 0.6% (May), 0.8% (Apr)

UK consumer inflation jumped to an annual rate of 4.4% for the July period, overshooting forecasts. Prices were up 3.8% in June. On the month prices remained flat, compared to June's 0.7%, but this was also larger than the -0.2% expected. It's the highest since comparable records began in 1997, and is the 3rd month that prices are above the 3% upper limit (3.3% in May, 3.0% in April) that the Bank of England sets.

Other data today showed house prices falling and retail sales declining as the UK economy teeters near a recession. Just as growth is stalling prices remain highly elevated as a result of oil and food prices. Oil prices did easy to end July and to start August, so that may have an effect on next month's number. The Bank of England, with rates at 5% is unable to hike, but at the same time doesn't want to cut rates to stimulate growth for fear of further recessionary pressure. Like a deer caught in headlights, the BOE will wait and see.

From the Release: "Consumer Prices Index (CPI) annual inflation – the Government’s target measure – was 4.4 per cent in July, up from 3.8 per cent in June.

The largest upward pressure came from food and non-alcoholic beverages where prices rose this year but fell a year ago. Within this division, there were large upward effects from meat, bread and cereals, and vegetables. There were further large upward pressures from:

• transport costs, mainly due to the price of fuels and air transport. The average price of petrol increased by 1.2 pence per litre between June and July this year, to stand at 118.8 pence, compared with a fall of 0.4 pence last year. The other large upward effect came from passenger air transport where fares rose by more than last year particularly on European routes."

For June
Provided by: Communities and Local Government
Official Release: Press Release
Official Release: PDF

The Department for Communities and Local Government said today its housing price index (HPI) showed prices 0.6% higher compared to June 2007. Thats a drop off from May's downwardly revised 3.0%. Last week, the HBOS HPI for July, saw prices fall the most in almost a quarter century (8.8%) on an annual basis. The DCLG indicator is not as closely followed as the HBOS, but it is also showing a clear deterioration in housing prices in its survey.

From the Release: "The UK average house price grew by 0.6 per cent in the year to June 2008, down from 3.0 per cent in the year to May 2008. Between May and June there was a fall of 0.7 per cent in the prices index of properties bought compared with a rise of 1.6 per cent over the same period last year, resulting in a decrease in the annual rate.

• UK house prices were 0.6 per cent higher than in June 2007.
• The mix-adjusted average house price in the UK stood at £215,029 in June 2008 (not seasonally adjusted).
• UK house prices fell by 1.1 per cent in the quarter ending June 2008. This compares with a fall of 0.1 per cent for the quarter ending March 2008.
• By country annual house price growth was highest in Scotland (+5.7 per cent) and lowest in Northern Ireland (-9.4 per cent).
• Annual house prices fell by 1.0 per cent in Wales, and rose by 0.5 per cent in England.
• House price figures for April and May 2008 have been revised from those published last month due to the receipt of new data from lenders who provide information quarterly rather than monthly."

For June
Provided by: Bureau of Economic Analysis
Current Release: (HTML)

Exports m/m: 4.0%, pr. 0.9% (May), 3.3% (Apr), -1.7% (Mar)
Imports m/m: 1.8%, pr. 0.3% (May), 4.5% (Apr), -2.9% (Mar)

Exports surged in June and unexpectedly narrowed the trade gap by 4.1% to $56.77B from a deficit of $59.2B in May. Exports totaled a record $164.4B while imports totaled $221.2. Exports grew 4.0%, the fastest pace since Feb. 2004. The weaker Dollar was most likely a key driver of export growth, which has partly propped up the US economy during the last quarter. The import figure reflected a record amount dedicated to purchases of foreign petroleum ($44.5B), and record purchases of industrial supplies from overseas, and outlays for foreign-made autos and parts. 

If prices are taken out of the equation, the trade deficit narrowed to $39.1B, the lowest since Dec 2001. It was $43.5B in May. Since this number is used in calculating GDP growth, it may be a reason to revise expectations upward. 

Preliminary Version for 2nd Quarter
Provided by: Cabinet Office
Official Figures: PDF

Nominal GDP q/q: -0.7%, forecast -0.8%, pr. 0.2% (1Q)
Annualized GDP: -2.4%, forecast -2.3%, pr. 3.2% (1QF), 3.3% (1Q Rev)

Japanese GDP hit forecasts of a 0.6% decline, with annualized GDP falling to -2.3%. The economy had expanded a downwardly revised 3.2% in annual terms in the 1st quarter. Japanese stocks as measured by the Nikkei 225 Stock Average fell 2.1% on the news, the most since August 1st. Exports declined for the quarter, the first time that's happened in 3 years. Slumping sales to the US have been joined by weak demand from Europe and even Asia. With consumers weighed down by high inflation and a slackening job market, domestic spending is slackening.

The Yen gained as investors and traders cut short so called "carry-trade" positions. A sharp slowdown in the 2nd largest economy will only accelerate the global slowdown already underway. There was a bout of risk aversion as traders sold riskier assets.

For Aug
Provided by: Westpac Melbourne Institute
Official Media Release: PDF

Consumer sentiment rebounded in August climbing by 9.1% to put the index at 86.2 for August from 79 in July. Westpac chief economist Bill Evans said a fall in petrol prices during the past month made consumers more confident. This is the third biggest jump in the Index in the last five years but it comes as no surprise. Apart from the last few months this
is still the lowest read in the Index since June 1993.

From the Release:"People clearly felt some relief about their finances emphasizing just how sensitive family budgets have become to petrol prices," he said.

"We are confident that the two most important variables which influence consumer sentiment are interest rates and petrol prices. In fact petrol prices have been the key driver of the Index since April. Over the three months from April to July mortgage rates were broadly steady but the Index fell by 10.1% to its lowest level since 1992. During that period petrol prices rose by 15%. Since the last Survey in July we have seen a very welcome 8% fall in petrol prices. We expect that the 9% surge in the Index has mainly been due to that sharp fall in petrol prices." he said.

Oil prices have dropped almost 23% from their high near $147 a barrel on July 12. The RBA has also signaled it will lower rates as its next move, so consumers may be breathing a small sign of relief. The Aussie was caught up in selling as the Yen strengthened on a scaling back of carry-trade. 

For July
Provided by: Office of National Statistics

Claimant Un. Rate: 2.7%, forecast 2.6%, pr. 2.6% (Jun) , 2.6% (May)

July's claimant count increased by highest level since the 71.4K in December 1992 and now totals 864,700, up 10,900 on the year. This is the sixth straight month of increase in unemployment claims and comes on the heel of an upwardly revised 20.0K in June. The claimant count unemployment rate also unexpected edged up to 2.7%, reflecting a wobbly labor market.

For 3 months to June
Provided by: Office of National Statistics

Earnings Ex. Bonus (q/y): 3.7%, forecast 3.7%, pr. 3.8% 

Wage growth was a moderate 3.4% in the June quarter compared to 2007 Q2, and undershot estimates of a lesser decline to 3.6%. It is expected that the increased costs to producers will eventually have to be passed on to consumers in the form of higher prices, lower wages, and soft employment, which in turn will weaken consumption and put a drag on inflation. However, the bank feared that inflation expectations might be embedded in wage price-setting. There has not been any evidence of that and the BoE has another reason to focus more on economic growth then supressing inflation.

Provided by: Bank of England
Current Release: Summary
Previous Release: PDF

The BoE's August Quarterly Inflation Report  highlighted the bank's expectation that the easing of demand will bring inflation back to below target level in the medium term. A contraction of the economy was apparent for the second quarter. While the bank is uncertain of the extent of the slowdown, it seesthe possibility of a more pronounced contraction going over the next year. It hopes that the spare capacity and reduced demand will drag inflation back below the target of 2% annual pace. There are concerns that a prolonged period of heightened inflation expectation may feed into price and wage settings. Until inflation shows a marked deceleration, the bank will be pressured to allow a slowdown to pursue as it may help to bring down prices. 

The Bank of England is now taking the stance that the RBA have been taking. It sees no prospect of increasing rates in order to battle inflation. The key remains in the volatile items of food and energy, which has shown some peaking. As harvest season comes, a record high level of corn and soy will be on the market and will lift some inflation pressure as well. Although the current stance of the BoE suggests inflation is the focus, a rate cut prospect is creeping in as conditions will become more fitting towards the year's end. The Sterling has sliding accordingly. From the release:

At its August meeting, the Committee noted that the immediate prospect was for CPI inflation to move substantially further above the 2% target, and for output to be broadly flat. The weakness of economic activity would open up a margin of spare capacity, which was likely to be necessary in order to return inflation to the target in the medium term and to ensure that longer-term inflation expectations remained close to the target. There were significant risks to the inflation outlook relating to the extent of the slowdown and to the persistence of the pickup in inflation. In the light of those risks, the Committee judged that maintaining Bank Rate at 5% at its August meeting was appropriate in order to meet the 2% target for CPI inflation over the medium term.

For June (s.a.)
Provided by: US Department of Commerce

Inventories y/y: 5.6%, pr. 5.2% (May), 5.4% (Apr), pr. 5.2% (Mar)

US business inventories climbed 0.7%, elevated by high oil prices. Its the largest since a 1.0% advance during January. Sales rose by 1.7% in June and 9.2% on the year, which put the inventory-to-sales ratio down to 1.23 in June from 1.24 in May. Extra activity in inventories while sales are up is a good sign for US GDP growth. The Dollar extended its morning gains slightly following the release. 

For July
Provided by: Business NZ/Bank of New Zealand
Official Release: PDF

From the Release: "The Bank of New Zealand - Business NZ seasonally adjusted PMI for July (48.8) bounced back from one of it lowest results in June to record its highest value since April. However, the sector was still in decline overall, and the latest figure is the lowest recorded for a July month over the history of the survey.

Three of the five seasonally adjusted main diffusion indices continued to record weakness, although all improved from the previous month. Production (50.0) showed significant improvement from the 42.9 recorded in June, as did deliveries (49.6). Finished stocks (52.1) was the only sub-index to show expansion for July, while employment (46.3) displayed a similar result to the previous month, indicating significant contraction in those employed in the manufacturing sector."