Key Events This Week: FOMC Minutes, PMIs, Industrial Data; WalMart And Home Depot Earnings

While global equity indices are at or close to all-time highs, DB’s Peter Sidorov writes that we’re seeing more challenging August crosswinds playing out in bond markets. Expectations for an imminent Fed rate hike have been pulled back, but this has been accompanied by a significant US curve steepening, with the backdrop of higher oil prices, elevated fiscal deficits, and demand for capital from the AI investment boom putting upward pressure on yields. The resulting long-end sell-off has also been a global affair, with 10yr OAT yields ending last week at their highest level since 2009 and the 30yr bund yields reaching a post-2011 high of 3.73% (see the full weekly recap at the end).

Bond markets could face further tests this week, with events including the flash August PMIs (Friday), minutes of the July FOMC meeting (Wednesday), as well as China’s monthly activity data a little later this morning. Meanwhile, this week’s 20yr Treasury auction (Wednesday) may become the most expensive Treasury bond issuance in the past 25 years – the current post-2001 high is a 5.245% yield at a 20yr auction in October 2023 and 20yr yields were 5.26% as of Friday.

That Fed pricing will be in focus with the minutes of the July FOMC meeting due on Wednesday. Given Chair Warsh has stepped back from offering policy guidance, the minutes may shed extra light on how the Fed is weighing inflation risks as well as their urgency to act should those risks remain elevated (narrator: “they won’t“). Chair Warsh described the July discussion as a “good family fight” following the meeting, which saw three dissents in favor of a 25bps hike. While the minutes will be slightly stale after last week’s relatively tame CPI and PPI data, the +0.18% MoM reading our economists now foresee for July core PCE inflation still translates to a +3.2% YoY pace. So while the inter-meeting inflation data has likely reduced the urgency for imminent action by the Fed, they are far from providing sufficient confidence that inflation is trending back to the Fed’s objective.

Investors will also be watching the details of the FOMC discussion in the context of the sharp curve steepening we’ve seen since the July Fed meeting. The 2s10s slope has steepened by +20bps since July 28, its sharpest 13-session rise since the post-Liberation Day Treasury sell off last April.

Turning to this week’s data in more detail, the highlight will come with the flash August PMIs on Friday, including those for the US, Eurozone, Germany, France, UK and Japan. The resilience in economic activity data, including the PMIs, in the face of the Iran energy shock has been an important factor in supporting continued pricing of rate hikes across the major economies. Indeed, in July the composite PMI reached its highest levels since the start of the year in both the US and the Euro area.

In other events, we’ll have the latest Riksbank decision on Thursday, which is expected to keep rates on hold for an eighth consecutive meeting. Elsewhere in Europe, we’ll have the ZEW survey in Germany on Tuesday and the ECB’s July consumer expectations survey due Friday. For the latter, our own dbDataInsights survey suggests an uptick in short-term expectations but more stable medium-term ones. Otherwise, the UK will dominate the European data calendar, with the July inflation print on Wednesday, labor market data on Tuesday and retail sales on Friday. For the CPI print, our UK economists expect headline at 2.92% YoY and core CPI at 2.54%.

Before all that, the focus will be on China July activity data, including retail sales and industrial production, which will be out an hour or so after this hits your inboxes. The release comes as China’s domestic demand growth has been lackluster in recent months, putting the reflation that has emerged since late 2025 at risk. Underwhelming domestic growth has also contributed to the underperformance in China’s equity market, with the main indices essentially flat YTD, in contrast to a +13.7% rise for the S&P 500, +11.1% for the Stoxx 600 and +36.5% for the Nikkei.

Back to the US, where the earnings season begins to wind down…

… the spotlight will be on the US retailers Home Depot (Tuesday), Target, TJX (Wednesday) and Walmart (Thursday) to gauge the health of the US consumer. Other names to watch include Analog Devices and Deere in the US and Alibaba and Baidu in China.

Turning just to the US, the key economic data releases this week are the import prices report—because of its potential implications for core PCE—on Tuesday and the Philadelphia Fed manufacturing index on Thursday. There are currently no scheduled speaking engagements with Fed officials this week. The minutes to the FOMC’s July meeting will be released on Wednesday.

Monday, August 17 

• 08:30 AM Empire manufacturing, August (consensus 10.5, last 15.6)

Tuesday, August 18 

• 08:30 AM Import prices, July (consensus +0.1%, last +0.3%): The import prices report contains the remaining source data relevant to estimating July core PCE: the import price index for air passenger fares. Based on the details of last week’s CPI and PPI reports, we currently estimate that the core PCE price index rose 0.20% in July, corresponding to a year-over-year rate of +3.24%.
• 08:30 AM Housing starts, July (GS -8.0%, consensus -5.9%, last +19.0%): Housing permits, July (consensus +0.1%, last -2.6%); We forecast that housing starts declined by 8.0%, reflecting payback from last month’s outsized increase in multi-family housing starts.
• 09:15 AM Industrial production, July (GS +0.5%, consensus +0.3%, last +0.1%): Manufacturing production, July (GS +0.4%, consensus +0.2%, last flat); Capacity utilization, July (GS 76.2%, consensus 76.3%, last 76.1%); We estimate industrial production increased by 0.5% in July, largely reflecting strong auto and electricity production. We estimate capacity utilization edged up to 76.2%.
• 10:00 AM Pending home sales, July (GS flat, consensus +0.5%, last -5.4%)

Wednesday, August 19 

• There are no major data releases scheduled. 
• 02:00 PM FOMC meeting minutes, July 28-29 meeting : The run-up to the July FOMC meeting was unusually dramatic, with markets pricing a roughly 35% chance of a hike ahead of the meeting. But the meeting ended with no change to the funds rate, no substantiative changes to the post-meeting statement, and no policy guidance or explanation of the FOMC’s interpretation of the inflation situation. Presidents Hammack, Kashkari, and Logan dissented in favor of a 25bp rate hike. We had expected that most FOMC voters would not want to hike at the July meeting because the June inflation data showed substantial improvement relative to prior months. Many voters have said that they want to see sustained improvement in the inflation data and are open to raising rates eventually if necessary. While Warsh downplayed the role of the June CPI report during his press conference, we suspect that was the thought process for most of the other eight voters who preferred to leave the funds rate unchanged. We will look for details in the minutes on the assumptions underlying participants’ economic outlook and views of the balance of risks at the time. Since the meeting, the labor market and inflation data have looked softer.

Thursday, August 20 

• 08:30 AM Initial jobless claims, week ended August 15 (GS 210k, consensus 212k, last 209k): Continuing jobless claims, week ended August 8 (consensus 1,788k, last 1,777k)
• 08:30 AM Philadelphia Fed manufacturing index, August (GS 30.0, consensus 25.0, last 41.4)

Friday, August 21 

• 09:45 AM S&P Global US manufacturing PMI, August preliminary (consensus 53.9, last 53.9) 
• 09:45 AM S&P Global US services PMI, August preliminary (consensus 53.9, last 54.6) 

Source: DB, Goldman