Economic Calendar for week 15th - 18th April 2008

All times GMT not BST. BST is +1 Hr.

Tuesday April 15th:

FR - 06:45 - CPI M/M.
UK - 08:30 - CPI & Core CPI Y/Y.
UK - 08:30 - RPI Y/Y.
GE - 09:00 - ZEW Economic Sentiment.
EU - 09:00 - ZEW Economic Sentiment.
US - 12:30 - Empire State Business Conditions Index.
US - 12:30 - PPI & Core PPI M/M.
US - 13:00 - TIC Net Long-Term Transactions.
US - 17:00 - NAHB Housing Market Index.

Wednesday April 16th:

GE - 06:00 - CPI M/M.
UK - 08:30 - Average Earnings Index + Bonus Q/Y.
UK - 08:30 - Claimant Count Change.
UK - 08:30 - Unemployment Rate.
EU - 09:00 - CPI Y/Y.
US - 12:30 - CPI & Core CPI M/M.
US - 12:30 - Building Permits.
US - 12:30 - Housing Starts.
US - 13:15 - Capacity Utilization Rate.
US - 13:15 - Industrial Production M/M.
US - 14:30 - Crude Oil Inventories.
US - 18:00 - Beige Book.

Thursday April 17th:

EU - 09:00 - Trade Balance.
US - 12:30 - Unemployment Claims
US - 14:00 - Philadelphia Fed Manufacturing Index.
US - 14:00 - Leading Index.

Friday April 18th:

GE - 06:00 - PPI M/M.
UK - 08:30 - M4 Money Supply M/M.
UK - 08:30 - Public Sector Net Borrowing M/M.

EU - Europe wide
FR - France
UK - United Kingdom
US - United States
GE - Germany

The week ahead.

The economy, stupid was a phrase widely used during Bill Clintons successful campaign against George Bush Snr. Right now, we could simplify the phase even further in relation to the prospects for the UK and US in 2008; Its the housing market, stupid.

Fed Chairman Ben Bernanke has stated that much depends on the depth of US housing declines from here, and in the UK Gordon Brown has said that the Government will do everything in their power to help homeowners. Prior to the MPCs quarter point rate cut last week, Brown went as far as saying that the Bank of England can afford to cut rates because the UK has low inflation. With oil around $109, low inflation might be gilding the lily somewhat, but Brown knows and fears that a plummeting UK housing market could have a dramatic impact on the wider economy.

Last week it was revealed that some mortgage companies actually put up their rates following the Bank of Englands rate cut. It was a further blow for consumers when it was announced that UK mortgage approvals were down 3.5% on the previous month, and to make matters worse house prices experienced their biggest monthly fall since 1992.The two factors are of course inextricably linked. Many, including chancellor Alistair Darling have argued that the UK wont follow the US with a housing slump. It is not just politicians who are be hoping the optimists are right.

Friday got off to a bad start and got worse as the day progressed. European equities were stagnant until the news of General Electrics earnings miss hit the wires. Almost immediately, the FTSE crashed 100 points with the DAX and CAC falling even further in percentage terms. GE was at one stage the worlds largest company by market
capitalisation, and due to the fact it earns most of its revenue outside of the US, it is often seen as a bellwether for the global economy. US markets opened down on the news and were driven down lower with the release of the Michigan Consumer Sentiment Survey and inflation data, which showed the worst readings since 1982 and 1900 respectively.

Next week starts with UK PPI data on Monday, and the RICS house price balance around midnight. Tuesday starts with more UK inflation data, with CPI figures in the morning followed by US PPI and Empire State Business Conditions Index around midday. Average UK Earnings and bonus data arrives on Wednesday morning followed by US core CPI around lunchtime. US Unemployment Claims come in on Thursday with Friday being a relatively light day on the data front.

At one point last week the Nasdaq recorded its lowest volume for over a year and the VIX volatility index dropped to its lowest level since February. Low readings of the VIX can indicate complacency in the market and Fridays rout could be an indication that this was the case. As it is, Fridays sell off has hardly moved the VIX from its recent low and next week earnings season starts in earnest. There may therefore be some value in a volatility trade next week. An Up or down trade pays out if either of two triggers are hit. An up or down trade on the Nasdaq Composite with the triggers set as 2200 and 2400 could return 20% over the next 16 days.

David Evans

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