UBS Limited economist Stephane Deo is forecasting further declines for the various euro zone PMIs for July.

"We see Manufacturing PMIs falling to 48.5 from 49.2 in the euro area (consensus: 48.6), 51.5 from 52.6 in Germany (consensus: 52.0), and to 49.0 from 49.2 in France," Deo wrote in a note to clients. "Our Services PMI forecasts paint a similar picture."

Deutsche Postbank economist Heinrich Bayer is expecting to see the Ifo headline indicator slip further in July. However, Bayer stressed that the indicator would probably not fall past 100.

"This would be a level that is higher that the historical average, but we see clear slowdown," Bayer said.

While falls were predicted in both the expectations and current assessment components of the index, Bayer highlighted that the latter would see a stronger fall.

"The German economy was very strong at the beginning of the year, in the first quarter," Bayer said.

"But now we have clear signs of cooling and we think that this will have an effect on the current situation of the Ifo index."

Next week is also going to be important, with the release of the minutes from the Bank of England monetary policy meeting held on July 10, June retail sales and advance second quarter GDP.

While the UK central bank held rates at 5.00%, economists from Capital Economics wrote in their weekly research report that they are expecting the minutes to reflect the MPC leaning more towards rates cuts.

"For the first time, the minutes of June's meeting showed that some members discussed in detail the merits of raising interest rates," they wrote. "In that sense, the real 'news' over the last month has been the further deterioration in the outlook for growth and, in particular, the growing risk that the economy is heading for a recession. Accordingly, we suspect that the idea of a rate hike was dismissed more easily this month and that more attention fell on the case for lower interest rates."

Howard Archer, chief UK and European economist from Global Insight, is in line with the consensus for a modest boost to second quarter GDP numbers. In his research notes, Archer wrote that he isn't expecting much growth in the UK economy in 2008.

"We expect the economy to essentially stagnate through the second half of 2008 and the early months of 2009 as consumers rein in their spending in the face of major headwinds and investment is pared back," he said.

All times in EDT

Saturday

July 19-25 DE Import Price Index (M/M) June Exp: +1.0% Prior: +2.4%

July 19 - 25 DE Import Price Index (Y/Y) June Exp: +8.4% Prior: +7.9%

Sunday: The week starts with UK Rightmove housing prices, which fell 1.2% in June. The annualized housing prices rose 0.1%.

19:01 GB Rightmove House Prices (M/M) July Prior: -1.2%

19:01 GB Rightmove House Prices (Y/Y) July Prior: +0.1%

July 19-25 DE Import Price Index (M/M) June Exp: +1.0% Prior: +2.4%

July 19 - 25 DE Import Price Index (Y/Y) June Exp: +8.4% Prior: +7.9%

Monday: The Bank of Portugal will release its Statistical Bulletin for the month of July on Monday.

PT Bank of Portugal Publishes Statistical Bulletin

July 19-25 DE Import Price Index (M/M) June Exp: +1.0% Prior: +2.4%

July 19 - 25 DE Import Price Index (Y/Y) June Exp: +8.4% Prior: +7.9%

Tuesday: The Institute for Studies and Economic Analyses (ISAE) is scheduled to report on Italian consumer confidence for July. Economists are expecting a slight decline in consumer sentiment to 99 from June's 100 level.

3:30 IT Consumer Confidence Industrial (SA) July Exp: 99.0 Prior: 100.0

4:00 IT Trade Balance June Prior: €-1774.0

July 19-25 DE Import Price Index (M/M) June Exp: +1.0% Prior: +2.4%

July 19 - 25 DE Import Price Index (Y/Y) June Exp: +8.4% Prior: +7.9%

Wednesday: French consumer spending data will be published on Wednesday. Consumer expenditures are expected to fall 0.6% month-over-month in June after rising 2.0% in the previous month.

Year-over-year, the consensus forecast is calling for an increase of 1.5%, down notably from the 3.1% rise observed in May.

It's a busy day in the UK with markets waiting for the minutes from the Bank of England monetary policy meeting from the July 10 meeting.

Italian retail sales data will also be released and are expected to show a decline of 0.1% in May on a monthly basis. April had seen no change in sales levels compared to the previous month.

In addition, Eurostat will report on euro zone industrial new orders for May. Economists are expecting orders levels to have slipped 1.0% in monthly terms after rising 2.5% in April.

Year-over-year, the consensus forecast is calling for a deceleration in the orders' growth rate to 3.2%, down from April's 11.7% jump.

2:45 FR Consumer Spending (M/M) June Exp: -0.6% Prior: 2.0%

2:45 FR Consumer Spending (Y/Y) June Exp: +1.4% Prior: +3.1%

4:00 IT Retail Sales (M/M) (SA) May Exp: -0.1% Prior: 0.0%

4:00 IT Retail Sales (Y/Y) May Exp: 0.5% Prior: -2.3%

4:30 GB BBA Loans for House Purchase June Prior: 27968

4:30 GB Bank of England Minutes of Interest Rate Decision

5:00 EU Industrial New Orders (M/M) (SA) May Exp: -1.3% Prior: +2.5%

5:00 EU Industrial New Orders (Y/Y) May Exp: +2.1% Prior: +11.7%

July 19-25 DE Import Price Index (M/M) June Exp: +1.0% Prior: +2.4%

July 19 - 25 DE Import Price Index (Y/Y) June Exp: +8.4% Prior: +7.9%

Thursday: The first main economic activity indicator for Thursday will be the French purchasing manager's indexes for July. The manufacturing PMI is expected to fall to 48.8 from June's 49.2, while the services PMI is likely to dip to 49.5 from 50.1.

The PMIs for Germany are also scheduled for release on Thursday. Economists are predicting that the manufacturing PMI will decline slightly to 52.0 in July from the previous month's 52.6. The services PMI is also forecast to deteriorate, going to 51.5 from June's 52.1.

Thirty minutes after the release of the PMIs, Germany's Ifo Institute for Economic Research will release its business sentiment indicator for July. With declines likely in the expectations and current assessment components of the Ifo, the headline indicator is forecast to fall to 100.2 in July from June's 101.3.

Following the release of the individual euro zone state PMIs, the aggregate PMI for the euro zone will be published. Declines are expected in both indexes, with the services PMI tumbling to 48.8 from June's 49.1 reading, while the manufacturing PMI is likely to fall from 49.2 to 48.7.

In the UK, June retail sales will be released, which economists forecast to fall 2.6% following a 3.5% rise in May. The annualized rate is expected to rise 4.4% for June following a previous rise of 8.1%.

2:45 FR Business Confidence Indicator July Exp: 100 Prior: 102

2:45 FR Production Outlook Indicator July Exp: -17 Prior: -15

2:45 FR Own-Company Production Outlook July Exp: 4 Prior: 7

3:00 FR PMI Manufacturing July Preliminary Exp: 49.0 Prior: 49.2

3:00 FR PMI Services July Preliminary Exp: 49.7 Prior: 50.1

3:30 DE PMI Manufacturing July Advance Exp: 52 Prior: 52.6

3:30 DE PMI Services July Advance Exp: 51.5 Prior: 52.1

3:30 IT Business Confidence July Exp: 86.5 Prior: 87.1

4:00 DE IFO - Business Climate July Exp: 100.2 Prior: 101.3

4:00 DE IFO - Current Assessment July Exp: 106.5 Prior: 108.3

4:00 DE IFO - Expectations July Exp: 93.2 Prior: 94.7

4:00 EU ECB Euro-Zone Current Account (SA) May Prior: -0.3B

4:00 EU PMI Manufacturing July Advance Exp: 48.7 Prior: 49.2

4:00 EU Euro-Zone Current Account (NSA) May Exp: -6.0B Prior: -9.2B

4:00 EU PMI Services July Advance Exp: 48.8 Prior: 49.1

4:00 EU PMI Composite July Advance Exp: 49 Prior: 49.3

4:30 GB Retail Sales (M/M) June Exp: -2.6% Prior: +3.5%

4:30 GB Retail Sales (Y/Y) June Exp: +4.4% Prior: +8.1%

July 19-25 DE Import Price Index (M/M) June Exp: +1.0% Prior: +2.4%

July 19 - 25 DE Import Price Index (Y/Y) June Exp: +8.4% Prior: +7.9%

Friday: The main data release scheduled for Friday is euro zone M3 money supply. Economists are expected the growth rate to slow to 10.3% in seasonally adjusted terms in June, down from May's 10.4% rate.

The three-month average growth rate is projected to remain at 10.4% in June, unchanged from the previous month's figure.

Advanced second-quarter UK GDP will also be released, which is expected to rise 0.2% following a 0.3%. The annualized rate is expected to show growth expand by 1.6%, down from the previous rise of 2.3%.

3:30 IT Retailers' Confidence General July Prior: 107.3

3:30 IT Services Survey July Prior: 14

4:00 EU Euro-Zone M3 (Y/Y) (SA) June Exp: +10.3% Prior: +10.5%

4:00 EU Euro-Zone M3 3 month average (SA) June Exp: 10.4% Prior: +10.4%

4:30 GB GDP (Q/Q) Q2 Advance Exp: +0.2% Prior: +0.3%

4:30 GB GDP (Y/Y) Q2 Advance Exp: +1.6% Prior: +2.3%

4:30 GB Index of Services (3month/3month) May Exp: +0.4% Prior: +0.3%

July 19-25 DE Import Price Index (M/M) June Exp: +1.0% Prior: +2.4%

July 19 - 25 DE Import Price Index (Y/Y) June Exp: +8.4% Prior: +7.9%

By Neils Christensen, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Cristina Markham, This email address is being protected from spam bots, you need Javascript enabled to view it

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