4 Overnight Headlines and 3 Items for the Day

Market strategists at Nomura, including Pooja Kumra, highlighted the following four headlines overnight and said investors should keep they eye on the following three items for the day ahead.

Headlines:

• Euro area: The German ZEW investors‟ expectations survey for June came in at 29.8 (Consensus: 35; Previous: 33).
• UK: UK CPI inflation came in at 1.5% for May (Consensus: 1.7%; Previous: 1.8%), while RPI inflation was 2.5% (Consensus: 2.4%; Previous: 2.5%).
• China: Foreign direct investment fell 6.7% y-o-y in May after rising 3.4% in April (Consensus: 3.2%).
• Singapore: Non-oil domestic exports fell 6.6% y-o-y in May after rising 0.9% in April (Consensus: 0.5%; Nomura: 2.3%).

The Day Ahead

US Weekly chain store sales: Sales activity slowed in the week following Memorial Day. However, given that June is a five-week retail month ending on 5 July, many retailers are looking for strong numbers before the traditional July clearance sales.

US CPI: We expect higher seasonally adjusted gas prices to support headline CPI in May, which we expect to increase by 0.2% (2.0% y-o-y), in line with consensus (Previous: 0.3%). We expect core CPI to continue on its recent trend-like increase of
0.2% (1.9% y-o-y), in line with consensus.

US Housing starts: Housing starts bounced back strongly in April after being hampered by weather early in the year. We believe housing demand remains steady, but is constrained by less favourable affordability and supply issues. We forecast that starts fell
by 6.7% to an annualised rate of 1,000k in May (Consensus: 1029k; Previous: 1072k). We expect building permits to increase by 0.5% to an annualized 1,064k (Consensus: 1050k; Previous: 1080k)

Related ETFs: PowerShares DB US Dollar Index Bullish (NYSE: UUP), PowerShares DB US Dollar Index Bearish (NYSE: UDN), SPDR S&P Homebuilders ETF (NYSE: XHB).

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