This week’s key numbers could be crucial for interest rate determination – E24

This week we get important headline numbers from the US and the UK, which will set the tone for upcoming decisions from central banks. In addition, SAS has a deadline for receiving indicative bids in the bankruptcy protection process.

We are in the middle of the joint holiday, and this week we expect a good mix of key macroeconomic figures from the US, UK, China and Japan.

Headline numbers are particularly important for the basis of decision making and the development of interest rates on a global basis.

– It will be interesting to see whether the numbers coming out of the US will support market expectations of a peak in interest rates in July, and whether the numbers from the UK will lead to a single or double increase, says Handelsbanken chief economist Marius Gunsholt-Hoff to E24.

But already on Monday, the SAS has Deadline for submitting indicative bids to raise new capital. The company aims to raise 9.5 billion SEK. Deadline is September 18th.

SAS is currently going through a legal process under bankruptcy protection in the USA to clean up debt. The company says it aims to complete the process early in the year, when it previously said “the latter part of the second half of the year.”

Aviation analyst Hans Jørgen Elnæs believes the company will be successful in raising capital, according to NTB.

– Since we haven’t heard anything from the SAS or the New York bankruptcy court, and the deadline expires on Monday, I think there’s probably a lot going on. If not, we should be able to assume an announcement by the stock exchange, if they want to delay the process any longer, Elnæs tells the paper.

At Oslo Bors, the quarterly season is in full swing, and companies such as Aker, Yara and Norsk Hydro are among those opening their books of accounts next week. In the afternoon and evening, several quarterly numbers will also be released from the US.

Interest rate peak in July

In the US, we are starting to see trends towards moderation in economic activity, which could mean a pause in interest rate hikes. On Tuesday, we get important headline numbers on retail trade, industrial production, and inventories.

Retail trading is important for the interest rate decision later this month, according to Hov.

– There, an increase is expected due to the increase in car sales as there were discounts. So it’s a temporary effect, he says.

In the future, it is expected that the interest-sensitive portions of household consumption, including car purchases, will be more moderate as well as a decline in demand and thus weaker consumption trends.

The market is currently waiting for us to see one duetduet“Hawkish” and “duet” describe opposite beliefs about interest rates required by the financial picture. The “hawk” supports higher interest rates, while the “dove” wants lower interest rates. The central bank when the Federal Reserve (Fed) presents its decision on July 26.

– If we see more signs of weakness in consumption, it is mounting that the Fed may peak interest rates in July, says Hoff.

Core inflation is crucial

On Wednesday we will get figures about the price level in June for Great Britain. It will be the last major figure before the BoE’s interest rate decision on August 3.

– core inflationcore inflationCore inflation (CPI-JAE), also called core inflation, is adjusted for tax changes and without energy commodities. It is expected to remain unchanged at 7.1 percent, so there will be very strong price pressure, says Hoff.

There has been strong wage growth recently in the UK, and the market is expecting further increases from the BoE in August.

– The question is strength. If we get a bullish surprise on the numbers, we could get what’s called a double digit increase of 0.50 percentage point. In the same way, a decrease in the level of inflation will speak of an increase in one, says the chief economist.

A decrease in the level of inflation is expected due to energy prices and therefore it is not as important as core inflation.

slow growth in China

Next week we will also get key numbers from Asia. The inflation figures from Japan come ahead of the interest rate meeting at the end of July, where there is little expectation of further action.

China’s second-quarter GDP figures are expected to rise sharply due to the epidemic lockdown last year. At the same time, other, more relevant indicators of activity appear, such as figures for industrial production, retail trade and investments.

It will provide more up-to-date information on activity in the world’s second largest economy, and reflect current developments.

– In China, there has been more stimulus lately, so nothing else is expected from the public authorities there now. But it will be exciting to see what happens in the future anyway, as reopenings have been slower than expected, says Hoff.