Trump Strikes Back

Economic Events Outlook, June 25 – Trump Strikes on European Union

Posted Monday, June 25, 2018 by
Arslan Butt • 2 min read

What’s up, everyone.

Welcome back to another exciting week. On Monday, the market may exhibit thin trading volume in the absence of market-moving economic events. But considering the hike in trade war sentiments, the global stock markets can trade bearish today, while keeping the safe-haven assets supported.

Crude oil is under immense pressure after OPEC agreed on a modest increase in output to compensate for losses in production at a time of rising global demand. We will speak about gold, oil and the stock markets in more detail later, but for now, let’s take a quick look at the economic events today…

Watchlist – Top Economic Events to Watch Today

The trading week begins with an immense amount of uncertainty as U.S. President Donald Trump threatens to impose a 20% tariff on all European assembled cars entering the US markets. Last week, we spoke about how Trump’s focus could likely shift to the Eurozone and here we are. It’s threatening the German automotive business and ultimately placing a bearish pressure on the stock markets and the Euro.   

EUR – German Ifo Business Climate

At 8:00 (GMT), Ifo Institute for Economic Research will release the business climate figure. It’s forecast to be released at 101.9 vs. 102.2 in the previous month.

It’s a leading indicator and can help investors with future trends of the Euro. Quick recap –  the Ifo is a survey of about 7K businesses which asks respondents to rate the relative level of current business conditions and expectations for the next six months.

USD – New Home Sales

The Census Bureau is due to release the new home sales data at 14:00 (GMT) with a slightly positive forecast of 665K vs. 662K previously.

Why do New Homes Sales Matter?

This is a leading indicator of economic health because the sale of a new home triggers a wide-reaching ripple effect. For instance, furniture and appliances are purchased for the home, a mortgage is sold by the financing bank, and brokers are paid to execute the transaction. So, better than expected data is considered good for the economy.

JPY – SPPI y/y

SPPI stands for Services Producer Price Index and it shows a change in the price of services purchased by corporations. The Bank of Japan is due to release the data at 23:50 (GMT). SPPI is expected to rise by 1% compared to 0.9% gain in May.

Are you wondering how it impacts us?

Well, when corporations pay more for services, the higher costs are usually passed on to the consumer and BOJ is more than happy to have a higher inflation.

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