Asian shares enjoy the calm before inflation test
Key for the Federal Reserve will be U.S. consumer prices on Wednesday where economists look for rises of 0.2% in both the headline and core, with the annual core slowing a tick to 3.2%.
«That would likely bolster the Fed's confidence that disinflation is ongoing, allowing for a rate cut in September, but a core run-rate still above target should also speak against a larger 50bp cut or an intra-meeting cut,» said analysts at Barclays in a note.
«Moreover, we expect a robust 0.8% m/m increase in headline retail sales, pointing to continued resilience in the engine of the economy, the consumer, on the back of solid income and wealth fundamentals.»
As well as July retail sales, there is data on industrial output and housing starts, along with several surveys on regional manufacturing and consumer sentiment.
The futures market currently implies a 49% chance of the Fed cutting by 50 basis points in September, though that is down from 100% a week ago when Japanese equities went into free fall.
Early Monday, Nikkei futures traded at 35,370 compared to a cash close of 35,025. MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2%.
S&P 500 futures and Nasdaq futures were little changed in thin trading. So far, around 91% of the S&P 500 have reported earnings and 78% of those have beaten the Street.
Results from Walmart and Home Depot this week will offer a snapshot on how U.S. consumers are holding up.
China issues figures on retail sales and industrial production on Thursday, which are expected to
