Fed’s Powell, European inflation, China trade

FILE PHOTO: Federal Reserve Chair Powell testifies on Capitol Hill in Washington
FILE PHOTO: Federal Reserve Chair Jerome Powell testifies during a U.S. House Oversight and Reform Select Subcommittee hearing on coronavirus crisis, on Capitol Hill in Washington, U.S., June 22, 2021. Graeme Jennings/Pool via REUTERS/File Photo

July 9, 2021

(Reuters) – Federal Reserve Chair Jerome Powell testifies to U.S. Congress, plus the latest data on consumer sentiment in Europe and trade in China – here’s a quick look through ahead to next week’s top economic events and themes to be covered by Reuters bureaus.

UNITED STATES

Powell, in a semi-annual ritual, heads to Capitol Hill on Wednesday and Thursday for grillings by the two key committees tasked with the U.S. central bank’s oversight.

His most recent appearance was a tame affair, but, with inflation now running hot and the patchy recovery in job market, he could find the atmosphere a bit less congenial this time.

With Powell’s current term due to expire in just over six months and no signal yet on whether President Joe Biden will reappoint him, the Q&A with the Senate Banking Committee, in particular, could reveal how he is regarded by a panel that must sign off on either his reappointment or his replacement.

And after the post-payrolls lull, the data flow returns in earnest next week, with measures of inflation and consumer spending for June all on the calendar. It kicks off with CPI on Tuesday and PPI on Wednesday – both of which have delivered multi-year high readings of late – and wraps up on Friday with retail sales.

EUROPE

Many of the most important metrics are still of the medical variety in Europe, where rising cases of the Delta coronavirus variant are raising questions about whether remaining restrictions on activity can be lifted as once assumed.

A final read-out of June inflation on Friday is expected to remain around the 2% level barring surprises. More interesting could be Thursday’s set of IPSOS consumer sentiment read-outs from across the continent, plus UK jobs and bank lending figures the same day.

On the events front, finance ministers from the euro countries will on Monday have an exchange of views with their U.S. counterpart Janet Yellen. The discussion is expected to focus on the economic recovery plus banking and financial stability issues.

ASIA

Chinese trade data for June due out on Tuesday is the big event and should shed light on how exporters are faring with rising costs and transport bottlenecks.

Two of the regions more hawkish-leaning central banks come into focus after that.

New Zealand policy makers on Wednesday are expected to keep settings unchanged but there is growing expectation they could raise rates as soon as November, so lots of focus on commentary and forward guidance.

On Thursday, South Korea’s central bank is also expected to remain on hold, but consumer price pressures and a hot property market have heightened speculation about an August hike.

Thursday also features the quarterly growth readout from China, where Q2 GDP is tipped to return to the sorts of high single-digit growth seen throughout much of the past decade, as the pandemic base effects rollout. Still, there are growing concerns about slowing domestic consumption.

And lastly on Friday, the Bank of Japan is not expected to tinker with its main settings but it could trim growth forecasts amid fresh COVID cases and may put some flesh on the bones of its green finance support.

(Reporting by Reuters bureaus; compiled by Mark John, Dan Burns, Sam Holmes; Editing by Simon Cameron-Moore)