Watch Turkey elections, China and U.S. data

Genevieve Signoret & Patrick Signoret

Macro Views

Next week: the highlights

  • Sunday 10. Turkey: Presidential election (first round). Current prime minister Recep Tayyip Erdogan is widely expected to win the presidency, perhaps already in this first round. Folks worry that he has been in power too long: he has been prime minister since 2003 and is planning to concentrate power in the presidency, which is currently a mostly ceremonial post. Also, that he’s eroding secular, democratic institutions and polarizing society. In the short term, though, markets usually prefer stability and the status quo. One reason that Erdogan is a stabilizing force, says GlobalSource Partner Atilla Yesilada, is that he’s perceived as the only actor willing and able to make peace with the country’s Kurdish minority.
  • Wednesday 13. China: Industrial production, fixed investment, and retail sales (Jul).Markets are highly sensitive to Chinese activity data. We expect a slowing trend (to 6.5–7.3% over the next two years) as the government tries to rebalance growth toward consumption and away from investment and to deflate the country’s credit bubble without popping it.
  • Friday 15: USA: Industrial production (Jul). Both soft and hard recent data show overall activity picking up speed in United States. Consensus estimate: +0.4% month on month (from +0.2% in June).

Next week in detail

Events in red are those most likely to shake markets.

Sunday 10

  • Turkey: Presidential election (first round). Current prime minister Recep Tayyip Erdogan is widely expected to win the presidency, perhaps already in this first round. Folks worry that he has been in power too long: he has been prime minister since 2003 and is planning to concentrate power in the presidency, which is currently a mostly ceremonial post. Also, that he’s eroding secular, democratic institutions and polarizing society. In the short term, though, markets usually prefer stability and the status quo. One reason that Erdogan is a stabilizing force, says GlobalSource Partner Atilla Yesilada, is that he’s perceived as the only actor willing and able to make peace with the country’s Kurdish minority.

Monday 11

  • USA: Fed speech: Fisher (FOMC voter).
  • Mexico: Industrial production (Jun), SHF house prices (Q2).

Tuesday 12

  • Global: IEA monthly oil market report (Jul).
  • India: Industrial production (Jun).
  • USA: EIA Short-Term Energy Outlook (Aug), world agricultural supply and demand estimates (Jul), job openings and labor turnover (Jun). This report includes three indicators on Yellen’s dashboard: the quits, hires, and job openings rates. All three are moving up, but only the job openings rate has recovered to pre-crisis levels.

Wednesday 13

  • Japan: Monetary policy meeting minutes, GDP (Q2, flash). Consensus estimate: 6.8% quarter on quarter annualized (from +6.7% in Q1).
  • China: Fixed investment (Jul), industrial production (Jul), retail sales (Jul). Markets are highly sensitive to Chinese activity data. We expect a slowing trend (to 6.5–7.3% over the next two years) as the government tries to rebalance growth toward consumption and away from investment and to deflate the country’s credit bubble without popping it. 
  • Euro Area: Industrial production (Jun).
  • UK: Unemployment rate (Jun), quarterly inflation report. Watch for signals as to when the Bank of England might start to hike rates. Markets expect a first hike in early 2015.
  • USA: Retail sales (Jul), Fed speeches: Dudley (FOMC voter) and Williams (2015 voter).
  • Mexico: Unemployment (Q2), wage settlements (Jul), Banxico quarterly inflation report. The central bank updates its growth and inflation projections in this report. Recent policy meeting statements and minutes suggest that Banxico continues to expect inflation to end below 4% this year and to fall to roughly 3% early next year as the temporary shock from this year’s tax hikes recedes.

Thursday 14

  • India: Wholesale prices (Jul).
  • Korea: Bank of Korea monetary policy decision.
  • Euro Area: Consumer prices (Jul, final), GDP (Q2, flash). Consensus estimate: +0.9% year on year (same as in Q1).
  • USA: Unemployment claims (Aug 9).

Friday 15

  • UK: GDP (Q2, flash).
  • USA: U. Michigan consumer confidence and inflation expectations (Aug, flash), Fed speech: Kocherlakota (FOMC voter), industrial production (Jul). Both soft and hard recent data show overall activity picking up speed in United States. Consensus estimate: +0.4% month on month (from +0.2% in June).
  • Mexico: Business financing (Q2)
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