Economic calendar: ZEW index set for another pessimistic reading?

Summary:

• UK labour market report expected to show minor uptick in wage growth data (excluding bonuses)

• Market consensus suggests that the German investment professionals are still pessimistic

• Riksbank Governor Ingves to deliver two speeches today

As major events scheduled for this week will all take place on Thursday investors do not have many releases to follow earlier. However, in today’s calendar we can find sentiment data from Germany and labour market report release from the UK. When it comes to the latter one should be aware that recently it was Brexit newsflow that had bigger impact on GBP rather than macroeconomic readings therefore market reaction to today’s release has a chance to be muted. Last but not least, oil traders will be offered API oil inventories estimate in the evening.

9:30 am BST - UK, Labour market report for July. Bank of England will be meet on Thursday. However, it is rather unlikely that we will see any change in the monetary policy settings ahead of the Brexit scheduled for next year. Nevertheless, it may be wise to follow UK data to assess outlook for the GBP and the state of economy ahead of its departure from EU structures. The growth of average weekly earnings including bonuses is expected to remain unchanged at 2.4% YoY while the gauge excluding bonuses should show an increase of 2.8% YoY against previous 2.7% YoY advance. The unemployment rate is forecasted to remain intact at 4%.

10:00 am BST - Germany, Zew Economic Sentiment for September. ZEW headline index moved in July to the lowest level since second half of 2012 indicating growing pessimism among German investment professionals. However, August saw bounce higher from -24.7 pts to -13.7 pts what can be seen as improvement but it should be noted that every reading below 0 suggests that the German institutional investors and analysts are pessimistic. Median estimate points for slight deterioration to -14 pts in September.  

9:40 pm BST - API crude oil stocks. Spread between two major types of oil has widened lately and now Brent is trading with around $10 premium against WTI. Weather may boost oil prices in the nearby future as a storm is approaching the Gulf of Mexico where many oil extraction facilities are localized. In shorter perspective oil prices may be impacted by inventories data. Last week saw API data heralding a moderate drop in oil inventories that was later confirmed by DOE (in fact, DOE data showed a much bigger decline). This week market consensus suggests that we will see a 1.5 mb increase signalled by API.

Central bank speakers scheduled for today:

• 8:10 am BST - Riksbank’s Jochnick

• 8:15 am BST - Riksbank’s Ingves

• 12:45 pm BST - Riksbank’s Ingves

• 1:00 pm BST - ECB’s Nouy

OIL price failed to break below the 21-session moving average (yellow line on the chart above) and in turn we saw a bounce higher. The commodity price is approaching its previous swing level in the vicinity of $78.50 and inventory data may provide a major price impulse. Source: xStation5