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By HaleStewart November 16, 2014 11:00 am
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International Economic Preview For the Week of November 17-21

     The following economic releases will have a disproportionate impact on the news cycle over the next week.


Japanese GDP: this is probably the most important economic release of the week.  2Q Japanese GDP contracted over 7% as the result of a sales tax increase in the spring.  For the last two months, economic releases from Japan have shown a slowing trend of growth, implying that Prime Minister Abe’s policies may be stalling.  This release will show if the 2Q number was a statistical blip or the end of the line.


US Industrial Production and Capacity Utilization: Industrial production is one of the four coincident indicators used by the conference board.  It is also an extremely solid metric to gauge the current economic environment for most developed nations.  US IP has been in a solid uptrend since the end of the recession.


UK CPI and PPI: UK CPI has been declining on a YOY basis for the last several months, giving the BOE some policy room regarding the timing of their first rate increase.

BOJ Interest Rate Decision: earlier this month, the BOJ announced they would increase their stimulus program by allowing the government pension program to increase its allocation of equities.  If the 3Q GDP number disappoints, the BOJ will be under additional pressure to do something to increase growth.


UK and US Central Bank Meeting Minutes: meeting minutes always provide solid insights into the thinking of the various central bank’s policy setting committees.  In particular, market participants will be looking for clues for when rate hikes for each economy will begin.


European Markit Service, Manufacturing and Composite Numbers: the Markit surveys are excellent coincident indicators of both sector sentiment and overall macro conditions.  The last EU composite reading was 52.1.


Canadian CPI: the Canadian economy has quietly grown a decent rate for the last 1-2 years.  While their export sector hasn’t been as strong as the central bank wants, recent news on the unemployment sector has been encouraging.  CPI is currently at 2% Y/Y, giving the central bank plenty of policy breathing room

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




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