Economic Analysis

The most important data expected this week

United State

New Home Sales (July) - Tuesday (4:00 PM)

New home sales in the United States contracted 8.1% from the previous month to a seasonally adjusted annual rate of 590,000 in June of 2022, well below market expectations of 660,000. It's the lowest reading since April 2020, as the housing market cools down as rising mortgage and material costs hurt affordability. Sales decreased in the West (-36.7%), the Northeast (-5.3%) and the South (-2%) but increased in the Midwest (42.3%). The median sales price of new homes sold fell for the second month in a row to $402,400, but it was still well above $374,700 a year earlier. The median sale price was $402,400, up 7.4% from June of 2021. There are 457,000 homes for sale, which is 9.3 months of supply in stock, compared to 8.4 months in May.

Core Durable Goods Orders (MoM) (July) - Wednesday (02:30 PM)

New orders for US-made capital goods rose 1.9 percent from the previous month in June 2022, the largest rise since January and the fourth consecutive monthly increase. The numbers beat market expectations for a 0.5 per cent decline in a sign that business spending plans remain strong so far despite rising interest rates and inflation. Excluding transportation, new orders rose 0.3 percent and excluding defense, new orders increased 0.4 percent. Transportation equipment, up three months in a row, led the increase, $4.5 billion, or 5.1 percent, to $92.7 billion. Orders for non-defense capital goods excluding aircraft, a proxy for investment in equipment, rose 0.5 percent, as they were in May.

Pending Home Sales Index (MoM) (July) - Wednesday (04:00 PM)

US pending home sales fell 8.6% monthly in June of 2022, after increasing 0.4% in May, far more than market expectations for a 1.5% decline, as surging mortgage rates and home prices weighed on potential buyers. Pending sales declined in all four major regions: the Midwest (-3.8%), the Northeast (-6.7%), the South (-8.9%), and the West (-15.9%). On an annual basis, transactions decreased by 20%. “Contract signings to buy a home will continue to decline as long as mortgage rates continue to rise, as they have this year so far. There are indications that mortgage rates may be above or very close to a cyclical rise in July. If so, waiting Contracts should also begin to stabilize.”

US Crude Oil Inventories - Wednesday (4:30 pm)

US crude oil inventories fell by 7.056 million barrels in the week ending August 12, the largest drop since early April, while markets had been expecting a smaller decline of 0.275 million barrels. Moreover, gasoline inventories fell by 4.642 million barrels, compared to expectations for a decrease of 1.096 million barrels. Meanwhile, crude oil inventories in Cushing, Oklahoma, rose by 0.192 million barrels after pumping 0.723 million barrels in the previous period. Distillate stocks, which include diesel and heating oil, rose 0.766 million barrels versus expectations for an increase of 0.440 million.

GDP (QoQ) (Q2) - Thursday (02:30 PM)

An advance estimate showed that the US economy contracted 0.9% on a quarterly basis in the second quarter of 2022, after a 1.6% decline in the first quarter and technically entering a recession. Most investors were expecting 0.5% growth although some were betting on a negative reading. Inventories and business investment were major constraints. Inventories are mostly down at general merchandise stores as well as auto dealers. Residential investment sank 14%, structures 11.7%, and equipment 2.7%. Meanwhile, personal consumption expenditures slowed and grew 1%, with spending on goods down 4.4% and government consumption down 1.9%, partly reflecting the sale of crude oil from the Strategic Petroleum Reserve. On the other hand, net trade made a positive contribution for the first time in two years, as exports jumped 18%, led by industrial supplies, materials, travel and imports by 3.1%. Fed Chairman Powell recently said he does not believe the US has been in a recession and pointed to strength in the labor market.

Core PCE Price Index (MoM) (July) - Friday (2:30 PM)

US personal spending jumped 1.1% per month in June of 2022, beating market expectations for a 0.9% rise and well above the upwardly-adjusted 0.3% increase in May. The figures showed an overall increase in spending as higher prices forced consumers to pay more. Gasoline, new car and light truck fuels, health care and housing led the increases. However, real personal consumption expenditures, adjusted for inflation, rose a meager 0.1%, after falling 0.3% in May.

Personal Income Index (MoM) (July) - Friday (02:30 PM)

US personal income rose 0.5 percent from the previous month in June of 2022, the same month as the previous month and above market expectations of 0.5 percent. This was the fifth consecutive increase that reflects increases in compensation, led by private sector wages and salaries. And the owners' income, mainly non-agricultural. Other current transfer revenue increased by $12.9 billion in June, reflecting a corporate-to-individual legal settlement. National income and producer accounts record these adjustments on an accrual basis in the month in which the settlement is reached, regardless of when they are recorded in the companies' financial statements.

United kingdom

Manufacturing PMI - Tuesday (10:30 am)

The German S&P Global/ME Manufacturing PMI for Germany was revised slightly higher to 49.3 in July 2022 from an initial 49.2, but still indicated the first contraction in factory activity since June of 2020. New orders contracted the most in more than two years Due to lower investment spending, higher prices, higher customer inventory levels and continued supply chain frictions. Factory production levels also showed a sustained decline, while commodity producers trimmed their purchasing activity for the first time since mid-2020 amid a rapid build-up of inventories and a deteriorating outlook. The drop in demand for inputs was reflected in easing supply chain pressures and a further decline in cost inflation while output inflation slowed to its lowest level in 15 months. Employment levels continued to rise, albeit at a slower pace. Meanwhile, business expectations were the lowest since May 2020.

ALL TIMES ARE +2GMT