Korea’s July trade data and central bank policy meetings in Japan and India will be the highlights next week
A raft of economic data for July will come as the first test of the trade war that kicked off earlier this month.
While the 'soft' data on manufacturing purchasing managers' indexes (PMIs) may show the impact on sentiment, the hard data on trade should provide some sense of the actual hit. This keeps Korean trade data for July, the first for the month from Asia and probably the world, in the spotlight.
We expect a small annual decline of 2.6% in Korean exports - the second consecutive negative print.
Japan’s Central Bank (BoJ) dropped any reference to meeting its inflation targets in 2019 in its April statement. Since then, pundits have been trying to figure out what is coming next. The next monthly policy meeting on July 31, for so long a complete non-event, is now moving markets. Read further to see what we think.
That earlier statement change has prompted some to suggest that the BoJ was going to downgrade its inflation forecast and adopt a lower target – perhaps at the forthcoming 31 July meeting.
We strongly doubt it. But there are good arguments for doing so.
Draghi re-hashes the same lines to a sun-baked Europe - rates on hold until after "summer" 2019