Global Economy Week Ahead: China Trade, Yellen Testimony, U.S. Retail Sales

This week, trade data from China and industrial production from the European Union are expected to show strength, while in the U.S., reports on retail sales, consumer prices and industrial production will offer clues on how the world's largest economy is faring.

MONDAY: China's inflation should have held steady in June, reflecting stable demand for consumer and industrial products. Economists expect the consumer-price index to rise 1.5% from a year earlier and the producer-price index to increase 5.5%, both maintaining the same pace as May. (Data will be released Sunday evening U.S. time.)

WEDNESDAY: Business surveys suggest the eurozone's economic recovery gathered pace in the second quarter, and official figures on activity are starting to support that evidence. Figures from the European Union's statistics agency are expected to show a 0.8% rise in industrial production in May from the previous month, which would be the largest increase since November 2016. However, there are few signs that more rapid growth is lifting inflation, and the European Central Bank is therefore likely to proceed cautiously when considering a withdrawal of stimulus.

Federal Reserve Chairwoman Janet Yellen will deliver her semiannual monetary policy report to Congress on Wednesday and Thursday. Ms. Yellen has said job growth in recent months has been well above the pace necessary to absorb new entrants to the labor force and that weak inflation numbers largely reflect transitory factors.

THURSDAY: China's foreign trade, a bright spot in the world's second-largest economy this year, probably remained strong last month. Economists expect exports grew 9% from a year earlier, accelerating from May's 8.7% rise. Growth in imports probably moderated to 12.4% from 14.8%, widening the trade surplus to $44.2 billion in June, from May's $40.81 billion.

FRIDAY: The Commerce Department releases U.S. retail sales data for June, after sales in the struggling sector fell 0.3% in May, driven by a decline in car purchases and less spending at service stations. Economists surveyed by The Wall Street Journal expect sales ticked up 0.1% in June.

Economists will watch the U.S. Labor Department's June consumer-price index for any indication of whether recent weakness in inflation might be transitory, after May's report showed consumer prices fell slightly. Economists surveyed by The Wall Street Journal expect CPI increased 0.1% in June.

Later in the morning, the Federal Reserve releases U.S. industrial production data. This measure of output at factories, mines and utilities was unchanged in May from the prior month. Manufacturing, which accounts for the bulk of industrial production, has shaped up as a bright spot in the economy so far this year. Economists surveyed by The Wall Street Journal forecast industrial production grew 0.3% in June.

(END) Dow Jones Newswires

July 09, 2017 15:14 ET (19:14 GMT)