review the upcoming economic events that you should be monitoring during the week. This

week traders are hoping for a bit less stress after last week’s unexpected excitement.

Concerns about China ratcheted higher last week after the country shocked the world by

devaluing its currency. That raised the specter of a global trade war or that Beijing was

panicking over a more severe economic slowdown than expected. Chinese officials already spooked

global investors with their heavy-handed response to the crash in stock prices earlier this

summer. The biggest reason why China matters is size.

Unlike Greece, Puerto Rico or other one-off situations, China has the scale to impact

the entire globe. It's now the world's second-largest economy,

blowing past Japan and Germany in recent years. China is also the biggest consumer of raw

materials like oil and copper, both of which have plunged in recent weeks. A more dramatic

decline in Chinese growth could cause commodities to crumble further, unleashing financial havoc

on countries that rely on those natural resources. By the end of the week and after a rare public

announcement from the PBOC reversed market stress.

Over the weekend surveys from the Wall Street Journal and Reuters both pointed to two interest

rate increases by the Fed which should dominate trading this week. Gold should reverse gains

while the US dollar surges. A number of Fed policy makers have signaled the first rate

increase may come at their Sept. 16-17 meeting. “It will take a significant deterioration

in the economic picture for me to be disinclined to move ahead,” Federal Reserve Bank of

Atlanta President Dennis Lockhart told the Journal last week.

The week kicks off on Monday with the release of the New York Federal Reserve manufacturing

index, the housing market activity index from the National Association of Home Builders

and data on capital flows. On Tuesday, data on housing starts and building

permits will be released together with the usual weekly chain store sales figures. The

building permits data is the leading gauge on home building. Economists expect that permits

fell by 10 per cent in July. But housing starts may have remained stable at a 1.17 million

annual rate in the month. On Wednesday, the July consumer price index

(inflation) is issued. Federal Reserve policymakers would prefer to see some evidence that inflationary

pressures are picking up before they decide to lift interest rates. The big event of the

week will be the FOMC minutes release in the afternoon US time.

On Thursday the leading index is released together with data on existing home sales,

the pivotal Philadelphia Federal Reserve business survey and the regular weekly data on claims

for unemployment insurance.