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By HaleStewart May 11, 2015 8:05 am
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International Economic Preview For the Week of May 11-15

Hale Stewart is a former bond broker who has been writing about economics and financial markets since 2006 on the Bonddad Blog.  He is also a tax attorney with a domestic and international practice while also forming and managing captive insurance companies for US companies.   You can follow him on twitter at:@captivelawyer 

     Watch for the following releases next week.


UK Interest Rate Decision: up until several months ago, the UK and US were in a tight race as to which central bank would be the first to raise rates.  After the two bullish UK central bankers changed their vote to neutral, the US took the lead.  Recent GDP and inflation reports should keep the central bank in a neural position at this meeting.  But, you never know with central bankers.


Japanese LEIs and CEIs: Leading and coincident indicators summarize a group of indicators into a convenient reading.  Since May of 2014, the leading indicators have fluctuated between slight gains and contractions which portends a pace of moderate growth.  After a huge February spike, the March CEI reading dropped (as would be expected).  The combined reading for these two indicators is the economy is growing, but below potential.


China Industrial Production and Retail Sales: both of these numbers have been decreasing on a Y/Y bases for the last year.  Although both are still expanding at solid rates, the overall decline indicates not only a deceleration in the Chinese manufacturing industries but the inability of Chinese consumers to pick-up the economic slack.

EU GDP: recent EU economic releases – especially the Markit numbers – indicate the EU economy should expand moderately in the first quarter. 

US Retail Sales: retail sales have decreased in 3 of the last four months.  Weak personal consumption expenditure numbers in the latest GDP report confirmed this weakness.  The latest personal income numbers showed an increase in the personal savings rate, indicating shoppers appear to be pocketing the recent drop in gas prices rather than spending the windfall.  This will be the first reading from the 2Q.


US Industrial Production: this is a very important coincident indicator whose readings have been weakening since May of last year.  Oil’s decline is partially responsible, as is the strong dollar.  As neither of these developments has been completely resolved, expect another weak number.



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