Week Ahead-US CPI, Fed speakers, China activity data, RBNZ lead
Aug 12 (Reuters) -U.S. inflation data key to Federal Reserve interest rate expectations, speeches by Fed officials, China's monthly activity data, monetary policy meetings of the Reserve Bank of New Zealand and Norges Bank and U.S. earnings reports will drive markets this week.
U.S. July CPI on Wednesday and PPI on Tuesday should provide clarity on whether the markets have too aggressively priced in the probability of a 50-basis point Fed rate cut in September at 51% FEDWATCH, following the soft July employment report. Core year-on-year CPI is expected to ease to 3.2% from 3.3%.
The busy data schedule also includes the New York Empire State Manufacturing index, Philadelphia Fed Manufacturing index, retail sales, industrial production, capacity utilization, Philly Fed business conditions, business inventories, housing starts, University of Michigan consumer sentiment and inflation expectations.
Speeches by Fed policy makers Raphael Bostic, Alberto Musalem, Patrick Harker and Austan Goolsbee may provide more rate clues as officials downplay recession fears.
China's July monthly activity data on Thursday will be closely watched for signs of recovery in its floundering economy. Industrial output is expected to slip to 5.2% from 5.3% in June and retail sales to rise to 2.6% from 2.0%. January-July urban investment, unemployment and house prices are also due. July credit data will be released this week with a sharp drop in new yuan loans likely.
The Reserve Bank of New Zealand meets on Wednesday and most economists in a Reuters poll expect a hold on rates at 5.5%, with potential hints at easing in October as unemployment rises and inflation expectations soften. Markets imply an 81% probability of a 25 basis points cut RBNZWATCH. Data on food inflation is due.
In Europe, the eurozone ZEW survey expectations, employment, second estimate of quarter-on-quarter GDP, industrial production, balance of trade and German ZEW economic sentiment are the data highlights.
Japan has a low-key week with Monday a holiday and just PPI, Q2 GDP, and industrial production due.
The UK's busy data schedule will shape Bank of England rate expectations. Releases include inflation, jobs and average earnings, preliminary Q2 GDP, goods and trade balance, industrial production, and retail sales.
Australia will publish employment and wage price data. Reserve Bank of Australia Deputy Governor Andrew Hauser speaks on Monday while Governor Michele Bullock and other central bank officials appear before a parliamentary economics committee on Friday.
For more click on FXBUZ
The path to a rate cut: https://reut.rs/3WzrtLe
China consumer prices jump, producer deflation persists: https://reut.rs/46Do9mW
Krishna Kumar is a Reuters market analyst. The views expressed are his own.Editing by Ewen Chew
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