The mid-August lull falls heavily this week with most of the key trade areas gearing up for an austerity-inspired staycation, rather than a full week on the tiles in Ibiza. However, against a background of such uneven economic performance, a number of key numbers in the US and Europe will still interest investors.
The first figure that leaps out of the eurozone on Monday will be the official level of Italy's public debt in June. This had risen to a new record of €1.96 trillion in May as the recession-hit economy ground to a halt during the first half of the year, contracting by as much as 0.7 per cent during the second quarter alone. That ultimately places upward pressure on the country's borrowings as tax income falls; the forecast is that public debt will continue to rise this year by 1.9 per cent, although the nation's short-term borrowing costs have stabilised in the past two weeks after a confidence-boosting exercise by the head of the European Central Bank, Mario Draghi.
Eastern Europe will get a rare moment of attention on Tuesday when Estonia releases it unemployment figures. It is fair to say that Estonia, fine country though it is, makes little real impact on the European scene, apart, perhaps, from the Eurovision song contest. But its rapidly recovering economy offers a model for the rest of the continent. In short, the Estonians took a massive hit on speculative housing - values have crashed 50 per cent from their peak - but, in response to stabilised asset prices, the economy has started creating jobs and unemployment is expected to be a relatively manageable 11.5 per cent. Contrast that with Spain's situation - house prices are still falling and you have a 50 per cent chance of being on the dole if you are under the age of 25.
Poor Spain takes the stage the same day with a comprehensive overview of consumer prices. Core CPI, which strips the distorting effect of the euro, is expected to show deflation in full swing with month-on-month prices retreating at a monthly pace of about 0.2 per cent.
The latter part of the week is dominated by US data, with industrial production, housing starts and building permits pointing to the country's stronger economic performance. The figures for housing starts and building permits on Thursday is particularly interesting. Recent months have seen a stabilisation in property prices in volatile inner city boroughs, which could be the first sign that the long house price bust has at last found a floor, so to speak. Housing starts aren't expected to show much growth in July - ironically, the prolonged drought has meant a faster building season, presumably as builders have fewer excuses not to get on with the job. However, the number of building permits issued for the same month, which often presages a spike in house starts, is forecast to rise well over 1 per cent to 770,000. Industrial production is also gathering pace, with forecasts of an increase of 0.5 per cent for July, up from 0.4 per cent on the previous month.
