This week, the spotlight is likely to turn to the ECB monetary policy decision, with investors eager to see whether the Bank will just cut its deposit rate by 10bps, or whether it will introduce a stronger stimulus package. From the UK, we get the industrial and manufacturing production prints, as well as the monthly GDP, all for July, but again data are likely to be overshadowed by politics as UK PM Boris Johnson may table another motion with regards to new elections. In the US, CPIs for August are coming out, but they are unlikely to alter much market expectations with regards to a 25bps cut next week.
On Monday, during the European morning, the UK industrial and manufacturing production prints, as well as the monthly GDP rate, all for July. Both IP and MP are expected to have declined 0.1%mom, after sliding 0.1% and 0.2% respectively in June. Something like that would drive the IP yoy rate down to -1.1% from -0.6%, while the MP yearly rate is forecast to have risen to -1.1% from -1.4%. That said, given that the manufacturing PMI for the month held steady at 48.0, we see the risks surrounding the MP forecast as tilted to the downside. With regards to the monthly GDP rate, no forecast is currently available. The nation’s trade balance for July is also coming out, with the forecast suggesting a widening deficit.
That said, once again British data are very likely to be overshadowed by Brexit developments. On Friday, the House of Lords has approved the bill that requires the government to...
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