European indices open lower after a negative session in APAC

European indices

European indices opened lower, following a negative session overnight in the Asia-Pacific region.

USD/JPY

In Japan, the JPY is back in Government intervention territory. After a week of constant declines, USD/JPY hit $145 a few hours ago. ¥145.21, a level not seen since last November. It was at that level that the Japanese government decided to intervene in the currency market last September. It did so again a month later when USD/JPY rose above $151.

Macroeconomic indicators

A few macroeconomic indicators are expected this week in the UK. On Tuesday, the unemployment rate was forecast to remain at 4% for the month of June. In May, the index surprised economists, who expected it to be two notches lower.

UK unemployment

The UK unemployment rate is now back at a level not seen since the end of 2021. On Wednesday, consumer inflation should continue to decline.

UK consumer price index

The market sees consumer price index (CPI) decelerating to 6.8% in July on an annual basis, down from 7.9% in June. Core CPI is also expected at 6.8% year-on-year (YoY), which would be only 10 basis points lower than the previous month, suggesting stickier broad-based inflation. And on Friday, retail sales are anticipated to drop on a monthly basis by 0.5%.

Reserve Bank of Australia

Some central banks will attract attention this week, starting tomorrow with Reserve Bank of Australia (RBA) minutes. A couple of weeks ago, the RBA unexpectedly kept its cash rate unchanged at 4.1%, despite inflation at 6%. The market has anticipated a 25-basis-point hike.

Reserve Bank of New Zealand

On Wednesday, the Reserve Bank of New Zealand (RBNZ) is expected to maintain the Official Cash Rate at 5.5%. Apart from a brief pause this winter, the RBNZ has constantly been in tightening mode since October 2021, raising borrowing costs by a total of 525 basis points.

Federal Open Market Committee

Also on Wednesday, the Federal Open Market Committee (FOMC) minutes The Fed raised its target range for the funds rate by 25 basis points on July 26 to 5.25%–5.5% to bring borrowing costs to their highest level since January 2021.

Legal & General

On the corporate front, the insurance sector will take centre stage in the UK with half-year reports from Legal & General Group tomorrow and Aviva and Admiral on Wednesday.Over in the US, it is the retail sector that will gather investors' attention.

Walmart

The world's largest supermarket chain, Walmart , is due to report on Thursday. Earnings are expected at $1.69 per share for the second quarter on revenue just short of $160 billion. Compared to the same quarter a year ago, this would mean a rise in revenue but a fall in earnings, a very similar situation to what we saw three months ago.

The increase in revenue reflects a rise in costs, but Walmart has to reduce its margins to keep its customers. Two other big names of the US retail sector are scheduled to publish quarterly reports this week: Home Depot on Tuesday and Target on Wednesday.