Economic calendar: US retail sales and industrial production; Germany ZEW index in the markets spotlight🔍

• Stock market sentiment in Europe is mixed; DAX contracts lose, FTSE gains
• Investors await ZEW data from Germany and data from the US (retail sales, industrial production)
• Canada's CPI inflation reading may cause elevated volatility on USDCAD

Investors are preparing for the first Fed rate cut since 2020, which Jerome Powell will almost certainly announce tomorrow. In recent days, we've seen the market build expectations around a 50bp cut, although 25bp would be a more conservative move on the Fed's part and is still not out of the question; especially given the recent solid US data. Yesterday, the NY Fed regional index turned out to be the highest since 2022, and optimism about the state of the economy with new orders among surveyed companies grew despite lower hiring plans. 

Today, the market will turn its attention to retail sales data, which will shed more light on the health of US consumers, as well as industrial data. In the case of sales, the market expects a fairly pronounced slowdown relative to July. In the European session, attention will turn to the German economy, where we will learn the ZEW sentiment (assessment of the current situation and expectations). The market expects another solid decline from already very low levels. The attention of the currency market will certainly be captured by the inflation reading from Canada.

Economic calendar

10 AM BST, Germany; ZEW economic sentiment index.

• Sentiment. Expected: 17 Previously: 19.2
• Assessment of current situation. Expected: -80 Previously: -77.3

1:30 PM BST, US; m/m retail sales. Expected: -0.2% Previously: 1%

• Core sales m/m: 0.2% Previously: 0.4%

1:30 PM BST Canada; CPI inflation y/y. Expected: 2.1% Previously. 2% (0% m/m vs. 0.4% previously)

2:15 PM BST, US; industrial production. Expected: 0.2% Previously: -0.6%

• Manufacturing Production. Expected: 0.2% Previous: -0.3%
• Capacity utilization. Expected: 77.9% Previously. 77.8%

3 PM BST, US, NAHB house price index. Expected: 41 Previously. 39

3 PM BST, US, business inventories m/m. Expectations: 0.3% Previously: 0.3%

9:30 PM BST, US; change in oil inventories according to API. Oil inventories expected to fall by 2.8 million barrels and about 0.6 million drop in gasoline

Central bankers' speeches

• 8:00 AM BST, ECB Simkus
• 9:30 AM BST, ECB Buch
• 3 PM BST, Fed Logan