Morgan Stanley Research previews the US July retail sales report due on Friday.

"We forecast headline sales were flat in July on a m/m basis, as were the headline ex-autos. We expect that auto sales forecasts were up 0.2%m/m, sales of building materials were flat. In our forecast, we pencil in a decline in the sales at gasoline stations (down 1.5%m/m), and also soft restaurant sales (down 0.2%)," MS notes. 

"For the retail control, we expect a slower pace of increase than previous months at 0.2%m/m. The slowdown in labor income growth, weakness in transactions data, pull-forward of Prime Day and other competing promotions to June, all weigh on our forecast. Positive control group prices, early back-to-school spending activity, and seasonal factors all provide a mild positive boost," MS adds.