Monday August 7th
German Industrial Production MoM/YoY
What is it?
This reading measures the physical output of the nation's factories, mines and utilities. Data is collected from companies in the sector with fifty or more employees, taking data from sectors including mining and quarrying, manufacturing, energy, and, in contrast to its Eurozone counterpart, construction.
What to expect
This reading is for June, whilst the May read was mixed, with YoY at 0.7%, a beat on the forecast of 0.5% but still lower than the prior, MoM came in at -0.2%, lower than both forecast and prior. This was attributed to the manufacture of basic pharmaceutical products and pharmaceutical preparations having a particularly negative impact on overall performance. Due to the volatility of this sector, it may not be too safe to bank on yet another decline in output.
Tuesday August 8th
German CPI YoY/MoM
What is it?
The consumer price index (CPI) is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly and annual changes in the CPI provide widely used measures of inflation.
What to expect
The consumer price index is the most widely followed indicator of inflation. Particularly in Germany, monetary policy decisions rest on the central bank’s inflation target, with inflation directly impacting the inflation rates charged to business’ and consumers.
German HICP YoY/MoM
What is it?
The Harmonized Index of Consumer Prices is an index of consumer prices calculated and published by Destatis, on the basis of a statistical methodology that has been harmonized across all EU member states. It’s due to this that the Governing Council of the EU uses it to define and assess price stability in the Euro-Area.
What to expect
The purpose of the harmonized report is to compare across the Euro-area, therefore, it does not have a higher importance than the standard report, but does offer a more comprehensive look at the entire EU economy.
What is the difference between HICP and CPI?
Whilst still calculating inflation, HICP is collected with the same methodology across the entier Euro-Area, thus allowing it to be compared, giving a complete picture for the ECB. On the other hand, CPI is a measure of inflation that is calculated individually, with no need to adhere to the same methodology of other Euro-Area counterparts.
Friday August 11th
UK Manufacturing Production MoM/YoY
What is it?
It shows the manufacturing output within the UK economy. The report has a focus on the change in volume of production. It doesn’t include price changes in production at different levels. Manufacturing activity is highly sensitive to changes in interest rates and demand, meaning it gives a better idea of how the economy is being affected by changes in rates and demand.
What to expect
A stronger than expected report would be positive to the currency and stocks, as it shows an economy that is growing and there is an increase in demand. Bond prices would see a decline, as bond traders see a positive figure as confidence in the economy’s performance. Bond traders prefer weaker than expected data, because traders are more likely to flock to the bond market to protect against potential downfalls in the economy.
UK Industrial Production MoM/YoY
What is it?
Similar to the manufacturing report, the Industrial Production report focuses on the first level of production which is raw materials. The report includes data on sectors like mining, which involves extracting natural resources like coal and oil, and utilities, which include the production and supply of electricity, gas, and water.
What to expect
If you have a decline in industrial production, it can have a negative domino effect on the rest of the chain of production, if raw materials are not being mined to produce furnished goods.
UK GDP QoQ/YoY
What is it?
GDP represents the total value of all goods and services in the economy, whether it was sold or is on the shelf. Another way to see it, is the overall health of the economy on a quarterly basis. How strong was the economy during that quarter?
What to expect
Stronger than expected GDP figures tend to lead to strengthening in the currency. This happens as traders/investors view the economy in a favourable way, particularly international market participants.
The stock market sees GDP as a measure of not only the strength of the economy, but demand as well. However, in a tightening cycle when the central bank is looking to dampen the economy's strength to stop it from overheating, stronger than expected GDP figures can sometimes lead to the stock market taking a hit in anticipation the central bank will raise rates.
