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Key data coming up from US session? - Nomura

Analysts at Nomura offered a preview of the next key data from America.

Key Quotes: 

"Initial jobless claims: Initial jobless claims have remained subdued recently in the face of a tightening labor market with healthy employment gains. Since January, initial claims have remained within a range of 227-261k, which is very low by historical standards. Continuing claims have also remained subdued in recent months. We expect both series to remain low as the labor market continues to tighten. 

Producer prices: Headline PPI increased 0.1% m-o-m in June, partly boosted by idiosyncratic factors related to holiday demand for certain food item prices. Further, a 0.5% decrease in energy prices lowered the headline index. Core PPI (excluding food, energy and trade) increased by a modest 0.2%. Relevant components in June’s PPI report did not strongly boost core PCE—some financial service prices were up but medical care services prices, such as hospital inpatient care and physician care services, increased only moderately. For July, consensus expects a steady 0.2% m-o-m increase in core PPI. Although the top-line PPI may be swayed again by volatile energy components again, steady increases in core PPI would suggest stable pace of pipeline price inflation. Note that we have already published our forecast for the July CPI report, scheduled for release this Friday (read more: July CPI Preview, 9 August 2017). Our expectations for food and energy prices from the CPI report may be subject to revision based on the PPI report. 

US Budget: The monthly budget statement from Treasury has received increased attention recently due to the upcoming deadline for raising the debt ceiling. In June, the US government posted a monthly budget deficit of $90bn. Earlier this year, in its monthly budget review, the Congressional Budget Office noted that revenues were coming in below expectations. That concern seems to have eased recently, but upcoming budget reports will be worth closely monitoring. Treasury Secretary Mnuchin recently sent a letter to Congress on 28 July urging to increase the debt limit by 29 September. Once Congress returns from the August recess, there will be 12 legislative days to address the debt ceiling before the end of September."

Author

Ross J Burland

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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