Take Five: Retailers roundup, UK economic woes, Europe’s power problems

Aug 12 (Reuters) – U.S. retailer earnings give a glimpse of how consumers are coping with soaring inflation, with a slew of data checking up on the health of the U.K. economy.

While the central bank puts New Zealand in the spotlight, power issues continue to plague Europe.

Here’s your week ahead markets at Sujata Rao in London, Aira Iosebashivili and Louis Krauskopf in New York, Vidya Ranganathan in Singapore, Ridhima Tharwani in New Delhi and Sumanta Sen in Mumbai is.

1/ Retailers round earnings

Investors are watching what the US’s largest retailer has to say about rising prices after last week’s rare good news on inflation.

Walmart (WMT.N) and Target (TGT.N), which reported second-quarter earnings on Tuesday and Wednesday respectively, recently lowered forecasts, saying inflation will weigh on profits and consumers will cut voluntary purchases. I warned that I was forced to read more

Retailers’ outlook on consumer behavior is important for investors trying to assess the pace of inflation. US consumer prices were flat last month, the biggest slowdown in monthly price gains since 1973.read more

Other major retailers’ reports include Home Depot (HD.N) on Tuesday and Lowe’s (LOW.N) the next day, but US retail sales data set Wednesday showed that consumers It gives you an overview of how you live.

2/ The sick in Europe make their condition worse

With the Bank of England’s dire warnings still ringing in their ears, traders can’t expect much cheer from the UK’s upcoming data.

The UK consumer price index, scheduled for Wednesday, is likely to rise above June’s 9.4% and head for October’s peak forecast of 13.3% read more.

The BoE is forecasting a long and deep recession, evidence of which may come from July retail sales data released on August 19.

The UK labor market has been strong so far. About 300,000 jobs were added in the quarter through May, leaving the unemployment rate at just 3.8%.

But after adjusting for inflation, wages, excluding bonuses, fell the most since records began in 2001. Such figures could emerge on Tuesday, just as rail workers prepare further for the strike that has crippled public transport this summer.

3/ Still 50 to 50 Down Under

Tight labor markets in New Zealand and Australia have made it difficult for both the mysterious Reserve Bank of New Zealand and the more vocal Reserve Bank of Australia to find a middle ground on rate hikes.

Investors are confident RBNZ Governor Adrian Orr is not yet ready to compromise on inflation and will raise another 50 basis points on Wednesday, despite a slight easing in inflation expectations and falling property prices. increase.read more

The RBNZ’s hints on wage growth could sway current expectations that the policy rate will reach 4% early next year.

Australia’s second-quarter wages data were released on the same day, and the tightest labor market in 50 years also saw the RBA set at 50 bps next month, with an anecdotal tightening of 225 bps in four months. suggesting signs. 1990s.

Meanwhile, Norway’s central bank is expected to raise rates at its meeting on Thursday. He raised interest rates by 50bp in June, and some economists expect him to raise rates significantly in August and he in September.read more

4/ pray for rain

Already reeling from gas shortages, Europe is facing higher electricity prices and potential blackouts as intense summer weather drives rivers, lakes and reservoirs to very low water levels.

Along the Rhine in Germany, barges can only navigate partially laden with coal, threatening power plant output. With less precipitation after a relatively snow-free winter, Norway may limit hydropower exports to protect its reservoirs.

As a result, European benchmark Germany’s baseload 2023 contracts have nearly doubled since mid-June, reaching a record high.

5/ home run

The cooling U.S. housing market gets some gut checks next week. July data on housing starts after U.S. new homebuilding activity plunged to a nine-month low in June will be announced on Tuesday.read more

Data on last month’s U.S. used home sales were released on Thursday.Such sales fell to their lowest level in two years for the fifth straight month in June.Read more

However, the easing in mortgage rates, after doubling in 2022, may underpin support for housing as 30-year rates have trended lower since mid-June.

The SPDR S&P Home Builders ETF (XHB.P) has surged 25% since mid-June after crashing in the first half of the year.read more

Edited by Louis Krauskopf.Edited by John Stonestreet

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