Focus will remain on uncertainty related to the situation in Ukraine. In terms of data releases the main event is US retail sales for July, where we expecta modest 0.2% m/m increase. This should follow as the temporary boost from theweather slump in early 2014 continues to wane. Excluding autos and gasoline retailsales are expected to show a more healthy gain, so the underlying trend remains OK.
In the UK the Inflation Report from Bank of England (BoE) will be released. Inlight of falling unemployment and improvement in other labour market indicatorsBoE could indicate that labour market slack has been reduced faster than expectedand it could pave the way for an interest rate hike later this year. Interestingly, thelabour market report for June will be released just ahead of the inflation report.
In the euro area we expect industrial production to have increased 0.6% m/m inJune, which is a bit more than consensus. However, we believe there is mainly upsiderisk to our forecast due to relatively strong data in France and Italy recently.
New York Fed president Dudley (dove, voter) and Boston Fed presidentRosengreen (dove, non-voter) are scheduled to speak this afternoon in connectionwith a conference covering Risks of Wholesale Funding. It will probably be technicalpresentations with no views on overall monetary policy. That said, Dudley’s views areimportant because they are believed to be close to chairwoman Yellen’s.
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