Data Barrage to Set Tone in FX

At 3:15 AM Swiss May Retail Sales (exp 4.8%, prev 3.2%)
At 4:30 AM UK June RPI m/m (exp 0.3%, prev 0.4%)
UK June RPI y/y (exp 4.2%, prev 4.3%)
UK June CPI m/m (exp 0.1%, prev 0.3%)
UK June CPI y/y (exp 2.4%, prev 2.5%)
At 5:00 AM Germany July ZEW current conditions (exp 88.0, prev 88.7)
Germany July ZEW economic sentiment (exp 19.0, prev 20.3)
At 8:30 AM US June PPI m/m (exp 0.2%, prev 0.9%)
US June PPI y/y (exp n/f, prev 4.1%)
US June core PPI m/m (exp 0.2%, prev 0.2%)
US June core PPI y/y (exp n/f, prev 1.6%)
At 9:00 AM US May Net TICS (exp $70.0 bln, prev $84.1 bln)
At 9:15 AM US June Capacity Utilization (exp 81.5%, prev 81.3%)
US June Industrial Production (exp 0.4%, prev 0.0%)
At 1:00 PM US July NAHB Housing Market Index (exp 27, prev 28)

A flurry of economic data slated for release in the Tuesday session will set the tone for the currency market and determine whether the dollar’s woes will continue. Already mired near record lows against the euro and 26-year lows versus the sterling, traders will analyze the inflation and manufacturing outlook for the US economy to gauge the likelihood for a Fed rate cut this year, which consequently, would likely prompt further declines for the greenback.

US reports set for release include June producer price index, May Net TICS, June industrial production, capacity utilization and the July NAHB housing market index. The combination of inflation, manufacturing and housing reports will provide greater insight into the health of the US economy – given fears that the slowdown in housing has continued to drag manufacturing lower while lingering inflation keeps the FOMC on hold. We anticipate headline PPI falling in July to 0.2% from 0.9%, while the core reading is unchanged at 0.2%. Industrial production for June is expected to improve to 0.4% from a flat reading in May and capacity utilization is forecasted to edge higher to 81.5% from 81.3%. The July NAHB housing market index is seen slipping to 27 from June at 28.