The focus for the week ahead in the US will be the minutes from the July Federal Open Market Committee (FOMC) meeting. It will be important to see if any additional insight as to when the first interest rate increase in the US for more than nine years will arrive. The proportion of FOMC members concerned about external events, given this meeting occurred before the recent volatility in China, will be of particular interest, as will any discussion on the potential size, frequency or terminal point of the anticipated hiking cycle. While the inclement weather disrupted US housing starts at the beginning of the year, July’s release is expected to reach the 1,200,000 mark for the first time since 2007. Conversely, building permits are expected to decline m-o-m; however, this follows three strong releases that have seen building permits rise 299,000, the largest three-month increase since 1990. The majority of the increase is evident in multifamily homes, primarily in the northeast. Existing home sales are expected to be lower from June’s 5.49 million print, the highest level in seven-and-a-half years. This slight dip will be of little concern given the series is up 8.3% year to date and the median home price has moved to a new record at USD236,400. Inventory currently stands at 5.0 months’ worth. The Consumer Price Index inflation release is expected to see little change. Core CPI, excluding food and energy, is expected at 1.8% y-o-y, while the headline series is expected at 0.2% y-o-y. The key differentiator between the two series is the decline in energy prices, which were down 15.0% y-o-y in June. The core series has been supported by a 3.0% rise in the cost of shelter, which rose 3.0% y-o-y in June. “HSBC”
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