BBH research team suggests that after a rather moderate for US economic reports week, investors are bombarded with a barrage of reports today.
“The most important of which is June retail sales. The risk is lower, and the market already knows that car sales declined sequentially. The component of GDP rose 0.4% in May and is expected 0.3% increase in June. If so the monthly average Q2 would be around 0.5%, which is almost twice the average Q1, which doubled the average Q4 15.
The USA. also reports June CPI. It is expected the core rate to be stable at 2.2%. It is expected that industrial production and manufacturing recover all or most of the decrease of 0.4% in May. Business inventories May be useful in the calculation of Q2 GDP, but is unlikely to be a market mover.
The report of the Empire State manufacturing will be one of the first readings of Q3 activity. In that vein, University of Michigan offers its preliminary estimate July consumer confidence. A drop in Treasury inflation expectations could offer some support after a heavy week that saw 10 year yields up 10 basis points. “