Investing.com -- Wednesday’s minutes of the Federal Reserve’s July meeting will be closely watched as investors look for guidance on the near-term path of interest rates. Retail sales data and retail earnings will give insights into the health of consumer spending while data out of China is expected to underline concerns over the faltering recovery in the world’s number two economy. Here’s what you need to know to start your week.

Fed minutes

Before markets start turning their attention to the Fed’s annual get together in Jackson Hole, Wyoming at the end of the month, investors will be focusing on Wednesday’s minutes from the central bank’s July policy meeting.

The Fed raised rates by 25 basis points last month and left the door open to another hike in September. The minutes will help investors gauge the appetite for further rate increases, although markets are betting on a pause in September.

Data last week showed that while U.S. consumer and producer prices increased moderately in July the overall trend indicated that inflationary pressures are easing.

The U.S. central bank has increased interest rates by 5.25 percentage points since March 2022 to bring inflation back down to its 2% goal.

U.S. economic data

The U.S. is to release July retail sales data on Tuesday which is expected to show a pickup in demand at the start of the third quarter after a smaller-than-expected increase in June.

Other data is expected to indicate that the manufacturing sector is still struggling - the Empire State manufacturing index is expected to fall into negative territory, while the Philly Fed manufacturing index is expected to remain in negative territory.

Data on the housing sector is expected to be more positive with reports on building permits and housing starts on Wednesday expected to show signs of stabilization.

The U.S. is also to release the weekly report on initial jobless claims on Thursday which is expected to tick lower after a larger than expected increase last week.

Retail earnings

Second-quarter earnings season is winding down with S&P 500 results presenting a mixed picture - companies are beating analysts' profit expectations at the highest rate in nearly two years even as revenue beats dropped to the lowest since early 2020.

The largest U.S. retailers are set to report their results this week, which will give investors an important insight into the health of consumer spending, a major driver of the U.S. economy.

Home Depot (NYSE:HD) is due to report ahead of the open on Tuesday, Target (NYSE:TGT) will deliver results on before Wednesday’s market open, followed a day later by Walmart (NYSE:WMT). Other major retailers such as Macy’s (NYSE:M) Nordstrom (NYSE:JWN), Kohl’s (NYSE:KSS) and Lowe’s (NYSE:LOW) will report in the coming weeks.

Investors will be focusing on what retailers have to say about how inflation is affecting margins as higher prices erode households’ spending power.

Chinese data

China’s post-COVID economic recovery has faltered in recent months after a strong first quarter, weighed down by weak demand at home and abroad.

Beijing is to release data on retail sales, industrial production and fixed asset investment on Tuesday, which are expected to point to only modest gains.

Data last week showed that China's consumer prices posted their first annual decline in more than two years in July, adding to pressure on policymakers to do more to shore up the economy.

Authorities have pledged to roll out measures to support the economy, though details have been scant, disappointing investors.

Oil price gains

Oil prices rose on Friday after the International Energy Agency forecast record global demand and tightening supplies, pushing prices higher for the seventh consecutive week, the longest streak of gains since 2022.

Demand touched an all-time high of 103 million barrels per day in June and could rise to a fresh peak this month, the IEA predicted.

Meanwhile, output cuts from Saudi Arabia and Russia set the stage for a sharp decline in inventories over the rest of 2023, which IEA said could drive oil prices even higher.

Supply cuts and an improving economic outlook have created more optimism among oil investors, OANDA analyst Craig Erlam told Reuters. However, he noted signs momentum was wearing thin after a sustained rally.

--Reuters contributed to this report

SYDNEY (Reuters) - The head of Australia's central bank on Friday said policy was in the "calibration stage" as the worst was over for inflation, though some further policy tightening might be needed depending on incoming data and evolving risks.

Appearing before lawmakers, outgoing Reserve Bank of Australia (RBA) Governor Philip Lowe said the recent data are consistent with the economy continuing to travel along the "narrow path" to a soft landing in which inflation eases without unemployment rising dramatically.

Inflation, which peaked late last year at over a three decade high of 7.8%, trended down to 6% last quarter and is projected to return to the RBA's target band of 2-3% in late 2025.

After a substantial increase of 400 basis points in interest rates since May last year, Lowe said policymakers were in the "calibration stage", as rates are already restrictive and working to establish a balance between supply and demand.

"Looking forward, it is possible that some further tightening of monetary policy will be required to ensure that inflation returns to target within a reasonable time frame," Lowe said, reiterating earlier comments.

"Whether or not this is the case will depend upon the data and the Board's evolving assessment of the outlook and risks."

This is Lowe's (NYSE:LOW) last such appearance given the government chose not to reappoint him when his first term ends in mid-September, instead elevating Deputy Governor Michele Bullock.

Lowe acknowledged it has been a difficult year for Australians.

"But the worst is over and we're getting to a place now to return to inflation back to target and a stronger labour market than we had before the pandemic," said Lowe.

The RBA's aggressive rate hikes have pushed up the cash rate to a decade-high of 4.1%, though it did pause in July and August to assess whether inflation was heading lower as desired.

Financial markets and analysts are split on whether there might be one more rate rise later this year..

Lowe added that rates would have to be 100 basis points above current levels to get inflation down to target in 2024.

By Swati Verma

(Reuters) -Gold prices held near one-month lows on Friday, shrugging off cooler-than-expected U.S. inflation figures for last month, with bullion staying on course to wrap up its worst week in seven as the U.S. dollar and bond yields stood strong.

Spot gold edged 0.1% higher to $1,913.95 per ounce by 0347 GMT, but traded near its lowest level since July 7 touched earlier in the day. U.S. gold futures were down 0.1% at $1,946.20.

Gold gained as much as 0.8% on Thursday after data showed the U.S. consumer price index (CPI) climbed 3.2% on an annual basis, but was less than the Reuters poll forecast of 3.3%, raising bets that the U.S. central bank will unlikely hike interest rates again in 2023.

Interest rate increases weigh on gold because they tend to lift bond yields and in turn raise the opportunity cost of holding non-yielding bullion.

"Once the CPI dust had settled, markets seemed to remember that core CPI at 4.7% is still not great – even if it was slower than expected," said Matt Simpson, a senior analyst at City Index, adding that gold's move higher lacked conviction.

"We also had Fed member Mary Daly putting a fly in the dovish ointment, saying whether another hold or hike at the Fed's next meeting is 'yet to be determined'. And that saw the U.S. dollar regain its strength."

Gold prices have slid about 1.4% so far in the week as the U.S. dollar index and benchmark 10-year Treasury bond yields were both on track for their fourth consecutive weekly gain. [USD/] [US/]

Among other precious metals, spot silver rose 0.2% to $22.72 an ounce and platinum added nearly 1% to $915.06. Still, both were on track for their fourth straight weekly loss.

Palladium jumped 0.9% to $1,298.30, eyeing its best week since mid-June.

Gold stays near 1-month lows as US dollar, yields hold ground

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By Prerana Bhat

BENGALURU (Reuters) - The European Central Bank will pause a more than year-long rate-hiking campaign in September, according to a narrow majority of economists polled by Reuters, but a further rise by year-end is still on the cards with inflation running hot.

There have been nine consecutive ECB rate rises since July 2022. But bank President Christine Lagarde began paving the way for a pause by telling a news conference after last month's 25 basis point hike: "Do we have more ground to cover? At this point in time I wouldn't say so."

Faced with slowing activity - particularly in the 20-member bloc's No.1 economy Germany - Lagarde also said incoming data would be crucial for future decisions, and either a hike or pause in September was a "decisive maybe".

In the poll 37 - or 53% - of 70 economists predict no move at the Sept 14 meeting compared with 47% in last month's poll, which would mean the ECB leaving its deposit rate at 3.75%, in line with market pricing.

The poll also showed 53% expecting a deposit rate rise to 4.00% sometime this year, with 33 economists saying September, and four October or December.

While markets are priced for a roughly 60% chance of a pause in September, they are split for year-end, with just over a 50% probability of a 4.00 deposit rate by then.

"Our baseline sees the ECB on hold for an extended period. However, inflation setbacks could still force a rate hike later this year," said Bas van Geffen, senior macro strategist at Rabobank.

"With the ECB remaining data-dependent, September and October pose the biggest risks for another rate hike should data fail to give the (Governing) Council the confidence inflation is gradually converging to target."

STICKY INFLATION

Flash data out last week showed core euro zone inflation, which strips out volatile food and energy, stuck at 5.5% in July and headline inflation, which the ECB targets at 2%, down only slightly to 5.3%.

Core inflation is forecast to average 5.0% this year and 2.9% in 2024 according to the poll, higher than the 2.5% headline forecast for next year.

Overall inflation was not seen at the 2.0% target until 2025 at the earliest, and more than 90% of economists polled see no rate cuts before the second quarter of 2024.

If the ECB hikes once more as the consensus view narrowly predicts, that would mean the highest deposit rate since the euro was introduced in 1999 and would amount to a combined 450 basis points of hikes in the current cycle.

The surge in price pressures initially driven by soaring energy costs has seeped into the broader economy and continues to weigh on consumer demand.

Germany has been one of the economies hardest hit by spillovers from the war in Ukraine and high energy prices, spelling trouble for the euro zone economy as a whole.

Despite revised data showing the 20-member bloc narrowly escaping a recession, its future prospects are not bright.

The euro zone economy will grow 0.1% and 0.2% in the current and next quarter, respectively, and average growth of 0.9% in 2024, the survey showed.

Sluggish economic growth was one of the major reasons for the ECB to signal an end to its hiking cycle from saying it had "more ground to cover" a few months back.

"We expect the economy to broadly stagnate over the next few quarters as the euro area will face several headwinds from high uncertainty, the lagged impact of the ECB tightening cycle... and less fiscal support," said Michael Kirker, European economist at Deutsche Bank (ETR:DBKGn).

(For other stories from the Reuters global economic poll:)

By Luc Cohen and Chris Prentice

NEW YORK (Reuters) - The U.S. Treasury Department will soon propose a rule that would effectively end anonymous luxury-home purchases, closing a loophole that the agency says allows corrupt oligarchs, terrorists and other criminals to hide ill-gotten gains.

The long-awaited rule is expected to require that real estate professionals such as title insurers report the identities of the beneficial owners of companies buying real estate in cash to the Treasury's Financial Crimes Enforcement Network (FinCEN).

FinCEN is slated to propose the rule sometime this month, according to its regulatory agenda, though the timeline could slip, said two people briefed on the developments. Anti-corruption advocates and lawmakers have been pushing for the rule, which will replace the current patchwork reporting system.

Criminals have for decades anonymously hidden ill-gotten gains in real estate, Treasury Secretary Janet Yellen said in March, adding that as much as $2.3 billion was laundered through U.S. real estate between 2015 and 2020.

"That's why FinCEN is taking this important step to put something officially on the books that would root out money laundering through the sector once and for all," said Erica Hanichak, government affairs director of advocacy group the FACT Coalition.

Some advocates say FinCEN, which declined to comment on the timing of the proposal, has moved too slowly. Officials first said in 2021 that they planned to implement the rule.

FinCEN has been struggling to complete a related rule that would unmask shell company owners. A bipartisan group of lawmakers has pressed FinCEN to tighten up that proposal, according to an April public letter. That debate has slowed down FinCEN's work on the real estate reporting rule, one of the sources said.

The American Land Title Association, which represents title insurers, says it welcomes the new rule but that FinCEN should delay it until the shell company rule is completed.

The proposed rule will be open to public and industry feedback.

PATCHWORK

While banks have long been required to understand the source of customer funds and report suspicious transactions, no such rules exist nationwide for the real estate industry.

Instead, FinCEN has operated real estate purchase disclosure rules, known as geographic targeting orders (GTOs), in just a handful of cities including New York, Miami and Los Angeles. The new rule is expected to effectively expand GTOs nationwide.

FinCEN implemented GTOs in 2016 after the New York Times revealed that nearly half of luxury real estate was bought by anonymous shell companies.

But the orders are easy to skirt by simply buying property outside the targeted areas, said Jodi Vittori, an expert on illicit finance at the Carnegie Endowment for International Peace.

Transparency advocates pushing for a nationwide rule point to the example of Guo Wengui, an exiled Chinese businessman who, according to prosecutors, used an anonymous shell company to channel illicit profit from a fraud scheme into the $26 million purchase of a 50,000-square-foot New Jersey mansion in December 2021.

Had Guo brought property across the Hudson (NYSE:HUD) River in Manhattan, it would have been subject to a GTO and likely flagged immediately to law enforcement.

Guo, a onetime business partner of former Donald Trump adviser Steve Bannon, has pleaded not guilty to fraud charges. His lawyers did not respond to a request for comment.

A FinCEN spokesperson said GTO reports provide valuable data.

Howard Master, a formal federal prosecutor, said law enforcement uses them to generate leads, but mainly to learn more about assets owned by individuals already under investigation.

"It'll identify an asset that is beneficially owned by someone that you might not otherwise have known about," said Master, now a partner at investigations firm Nardello & Co.

A 2020 report by the Government Accountability Office, Congress' investigative arm, found that nearly 7% of GTO reports identified individuals or entities connected to ongoing FBI cases. But the same report highlighted concerns about the ability of FinCEN, which has complained of chronic underfunding, to police the program.

For the new rule to be effective, FinCEN will need more enforcement resources, said David Szakonyi, a political science professor at George Washington University.

"FinCEN needs more people and more computers to process the information."

By Safiyah Riddle

(Reuters) - U.S. mortgage delinquency rates fell to a record low in the second quarter due to a strong job market and low interest rates prevailing on most home loans despite the big jump in mortgage rates over the last two years, a report on Thursday said.

Delinquency rates fell to 3.37% at the end of the second quarter, according to the Mortgage Bankers Association’s National Delinquency Survey, their lowest since the MBA began collecting data in 1979 and down from 3.64% year-on-year.

Seriously delinquent loans, which are 90 days or more past due or in the process of foreclosure, fell to the lowest non-seasonally adjusted rate in 23 years at 1.61%.

Economists are watching mortgage delinquency rates closely for signs of weakness amidst the Federal Reserve's aggressive 525 basis point interest rate increase since March 2022, which increased the cost of borrowing across the board.

While the MBA said many borrowers have been able to withstand surging mortgage costs in large part due to a resilient job market and strong wage growth throughout the year, most homeowners are also paying interest rates well below those charged on new loans.

Real estate brokers estimated in June that more than eight in 10 loans outstanding featured at rate below 5% at the end of 2022, well below the MBA's most recent contract rate above 7%. More than six in 10 pay 4% or less.

While the share of those paying such low rates is declining, many homeowners are opting to remain where they are rather than move and take on a new loan at current rates, which are approaching a 22-year high.

Despite the historically low delinquency rate, the MBA said not every borrower has been able to withstand the recent stress of hiked interest rates.

The delinquency rate on loans for low-income and first-time buyers, backed by the Federal Housing Administration (FHA), edged up 10 basis points annually to 8.95% in the second quarter.

Separately on Thursday, the National Association of Realtors released a report showing that the median home price in the second quarter fell 2.4% year-on-year to $406,000, albeit with significant variations nationwide.

“Home sales were down due to higher mortgage rates and limited inventory,” said NAR chief economist Lawrence Yun. “Affordability challenges are easing due to moderating and, in some cases, falling home prices, while the number of jobs and incomes are increasing.”

(Reuters) - European stocks rose on Thursday as investors digested a slew of corporate earnings and awaited U.S. inflation print that will likely determine the Federal Reserve's monetary policy path.

The pan-European STOXX 600 added 0.4% by 0707 GMT, having closed at a one-week high in the previous session.

U.S. stock futures rose ahead of data expected to show a slight acceleration in July consumer prices. On a month-to-month basis, CPI is seen increasing 0.2%, the same as in June. [.N]

Europe's personal & household goods sector, which houses the largest luxury brands, gained 1.1% after China lifted its pandemic-era restrictions on group tours for more countries.

Lifting insurers, Germany's Allianz (ETR:ALVG) gained 2.1% and Zurich Insurance rose 1.6% after both the companies reported better-than-expected results.

Limiting gains, Siemens slumped 3.5% after the German engineering group missed third-quarter profit estimates.

Denmark's Novo Nordisk (NYSE:NVO) slipped nearly 1% after the drugmaker said it will continue to restrict U.S. supplies of starter doses of its hugely popular Wegovy weight-loss drug.

By Kevin Buckland and Brigid Riley

TOKYO (Reuters) - The dollar rose to a one-month high above 144 yen on Thursday as monetary policy divergence was front of investors' minds ahead of crucial U.S. inflation data later in the day that should guide the path for interest rates.

Meanwhile, the yuan edged further from a one-month trough after the People's Bank of China again set a stronger-than-expected mid-point guidance rate in a sign of displeasure at recent weakness. That helped lift the Australian and New Zealand dollars from near two-month lows.

The dollar rose as high as 144.08 yen for the first time since July 7 as markets took the view that the Bank of Japan will be slow to exit stimulus, even with traders mostly betting the Fed is done with rate hikes.

A rise in crude oil to the highest since January also weighed on Japan's currency, because the resource-poor nation is a major oil importer.

"The fact that energy prices have risen for almost seven weeks, that's certainly weighed on the yen," said Tony Sycamore, a market analyst at IG.

A break above 145 would open the way potentially to 148 "if we get the U.S. dollar flexing again after the CPI," he said.

Despite the BOJ's decision to relax its control of long-term yields at the end of last month, policymakers have stressed the change was a technical tweak aimed at extending the shelf life of stimulus, chiefly defined by the negative short-term interest rate.

"Weak Japanese labour cash earnings data earlier this week has increased our conviction that the BOJ will leave interest rates unchanged at ‑0.1% over the rest of the year," Commonwealth Bank of Australia (OTC:CMWAY) strategist Kristina Clifton wrote in a note.

"The relative monetary policy outlooks between the U.S. and Japan suggests USD/JPY is likely to stay supported."

Against other rivals, dollar moves were muted ahead of the CPI data, with the U.S. dollar index - which measures the currency against the yen and five other currencies, including the euro and sterling - was basically flat at 102.50 in the Asian afternoon, near the centre of its roughly 101.98 to 102.80 trading range this week.

Compared to last Friday though, the index has appreciated 0.5%, setting it up for a fourth straight weekly gain.

The dollar has benefited from safe-haven demand in the wake of a run of poor Chinese economic data, while the narrative continues to build for a soft landing for the U.S. economy as price pressures mitigate.

Wall Street economists forecast the core consumer price index (CPI) to have risen 4.8% year-on-year in July, unchanged from the previous month.

Money markets currently lay 86.5% odds for the Fed to forgo another rate hike at its September meeting, and foresee the next move as a cut, likely in spring of next year.

Data on Wednesday showed the Chinese economy slipped into deflation last month, after a report the previous day showed a bigger than expected slump for both imports and exports.

However, the yuan edged up slightly to 7.2246 per dollar in offshore trading, strengthening for a second day, after the PBOC set a stronger official mid-point than the market consensus again on Thursday. The offshore yuan sank to the weakest since July 7 at 7.2514 on Tuesday.

The Aussie, which has tended to follow the yuan closely this week, rose 0.15% to $0.65385, rebounding from Tuesday's trough at $0.6497, the lowest level since June 1.

New Zealand's kiwi rose 0.1% to $0.6058, pulling away from Tuesday's low of $0.6035, which was the weakest since June 8.

(Reuters) -Financial losses due to supply chain disruptions dropped more than 50% on average in 2022, compared with a year earlier, but shortages and delivery delays remain challenges, according to a survey of companies being released on Thursday.

Disruptions led to an average $82 million in annual losses per company last year in key industries like aerospace, compared with $182 million in 2021, and $184 million in 2020, supply- chain risk management company Interos told Reuters ahead of publication.

The 2023 report data refers to disruptions from a year earlier as the survey was conducted in spring 2023 but asked about the preceding 12 months.

In this latest report, Interos surveyed 750 companies with annual revenues between $500 million and $50 billion from energy, financial services, oil and gas, healthcare, government and aerospace.

"The key takeaway is that people recognize it's better than it was, but it will not go back to the way that it was in 2019," said Interos industry analyst Tim White.

Labor and raw material constraints, as well as unforeseen disruptions remain supply chain headwinds, White said.

Executives were surveyed in the U.S., Canada and the UK and Ireland.

Globally, companies on Wednesday cited supply chains as an ongoing challenge, with Danish-listed turbine maker Vestas saying it expects disruption to continue for the rest of 2023.

Aptiv (NYSE:APTV) PLC said despite improvements in the supply chain, higher semiconductor pricing remains a challenge.

By David Milliken

LONDON (Reuters) - British house prices saw the most widespread falls since 2009 last month as interest rates hit a 15-year high, while rents surged by the most since 1999 as more landlords sold up, a survey showed on Thursday.

The Royal Institution of Chartered Surveyors (RICS) said its house price balance, which measures the difference between the percentage of surveyors reporting price rises and falls, dropped to -53 in July from a downwardly revised -48 for June.

This was the lowest reading since April 2009, during the depths of the global financial crisis, and below economists' forecasts in a Reuters poll for a drop to -50.

Interest rates for the commonest type of new mortgage in Britain - a two-year fixed rate - rose to their highest since 2008 at 6.86% in July, on expectations of further rate rises by the Bank of England as it battles high inflation.

Property sales fell in July at the fastest pace since April 2020 when the market was largely shut by the COVID-19 pandemic, and demand from prospective buyers also sank, according to RICS.

"The continued weak reading for the new buyer enquiries metric is indicative of the challenges facing prospective purchasers against a backdrop of economic uncertainty, rising interest rates and a tougher credit environment," RICS Chief Economist Simon Rubinsohn said.

Mortgage lender Nationwide reported last week that average house prices in July were 3.8% lower than a year earlier, the biggest annual fall since 2009, while earlier this week rival Halifax reported a 2.4% year-on-year decline.

Prices remain more than 20% higher than before the pandemic, however.

Conditions for renters were no easier, as some landlords sold up in the face of higher mortgage costs and increased regulation for the sector to require better energy efficiency and make it harder to evict tenants.

RICS' gauge of rents in the three months to July saw surveyors report the broadest increases since the series began in 1999. Demand from tenants rose at the fastest pace since early 2022, while the number of properties being offered by landlords fell by the most since the early in the pandemic.

Britain's Office for National Statistics reported that private-sector rents in England rose 5.1% in the year to June, the most since records began in 2006.