Key Events focus will be on a busy schedule with significant economic data and policy decisions from the BoJ, Fed, and BoE.
Monday – July 29
Key Events on watch
US
- 10:30 AM ET Dallas Fed Manufacturing Index for July
Global
- US Treasury Refunding Financing Estimates.
Tuesday – July 30
US Job Openings Expectations
- Labour market needs careful monitoring.
- Expected at 8.025M vs 8.140M prior.
- Job openings have been steadily decreasing since March 2022.
- Almost reaching pre-pandemic level.
US Consumer Confidence Expectations
- Expected to reach 99.5 vs. 100.4 prior.
- Last report showed slight dip in confidence, but index remains in a range since 2022.
- Confidence remained within narrow range due to strength in current labor market views.
- Potential weakening of confidence if material labour market weaknesses appear.
Key Events on watch
US
- 7:45 AM ET ICSC Weekly Retail Sales
- 8:55 AM ET Johnson/Redbook Weekly Sales
- 9:00 AM ET Monthly Home Price Index M/M for May
- 9:00 AM ET CaseShiller 20 City Index for May
- 10:00 AM ET Consumer Confidence for July
- 10:00 AM ET JOLTs Job Openings for June
- 4:30 PM ET API Weekly Inventory Data
Global
- Japan Unemployment Rate
- Eurozone Flash Q2 GDP
- US Job Openings
- US Consumer Confidence
Wednesday –July 31
Australian Q2 CPI Expectations
- RBA’s Hauser argues for policy rate steady.
- Expected CPI Y/Y: 3.8% vs. 3.6% prior.
- Trimmed Mean CPI: 4.0% vs. 4.0% prior.
- Weighted Median Y/Y: 4.3% vs. 4.4% prior.
- Q/Q reading: 1.0% vs. 1.1% prior.
BoJ’s Interest Rates and Inflation Forecast
- BoJ expected to maintain interest rates at 0.00-0.10%.
- 70% probability of a 10 bps hike in the market.
- Expected taper plan for bond purchases to be announced.
- No strong signals of inflation reacceleration.
- Slow rate hike due to potential damage to inflation goal.
Eurozone Flash and Core CPI Expectations
- Flash CPI Y/Y expected at 2.4% vs. 2.5% prior.
- Core CPI Y/Y expected at 2.8% vs. 2.9% prior.
- ECB members predict another rate cut in September.
- Market expectations for two more cuts seem reasonable.
- Next report expected in August before ECB decision on September 12th.
US Q2 Employment Cost Index Expectations
- Expected to rise to 1.0% from 1.2%.
- Comprehensive measure of labour costs.
- Not as timely as Average Hourly Earnings data.
- Fed closely monitors ECI.
- Wage growth remains high, easing over past two years.
Fed’s Rate Decision
- Expected to maintain steady rates at 5.25-5.50%.
- Decision likely to be dovish due to labor market and inflation easing.
- Market fully priced in rate cuts in September and December, with potential back-to-back cuts in November.
- Next CPI release key, with potential pre-commitment to rate cut at Jackson Hole Symposium.
Key Events on watch
US
- 7:00 AM ET MBA Mortgage Applications Data
- 8:15 AM ET ADP Private Payrolls for July
- 8:30 AM ET Employment Cost Index Q/Q for Q2
- 9:45 AM ET Chicago PMI for July
- 10:00 AM ET Pending Home Sales M/M for June
- 10:30 AM ET Weekly DOE Inventory Data
- 2:00 PM ET FOMC Rate Policy Meeting – no change exp
Global
- Japan Industrial Production and Retail Sales,
- Australia CPI,
- Chinese PMIs,
- BoJ Policy Decision,
- Eurozone Flash CPI,
- US ADP,
- Canada GDP,
- US ECI,
- US Treasury Refunding Announcement,
- FOMC Policy Decision.
Thursday – Aug 01
Market Expectations on BoE Rate Cut
- More data needed before policy decision.
- 50% probability of a 25 bps rate cut for the BoE.
- Bank Rate rises to 5.00% from 5.25%.
- Expectations misplaced as rates should remain steady.
- BoE’s chief economist Huw Pill remains open on timing of rate cut.
US Jobless Claims Weekly Update
- Initial Claims remain stable around cycle lows and within the 200K-260K range since 2022.
- Continuing Claims have been on a sustained rise, stabilizing more recently.
- Layoffs remain low, hiring is subdued.
- Expected Initial Claims for this week: 236K vs. 235K prior.
- Continuing Claims expected at 1856K vs. 1851K prior.
US ISM Manufacturing PMI Expected at 48.8 vs 48.5
- S&P Global US Manufacturing PMI slipped to 49.5 from 51.5.
- Inflation rate slowed to a level consistent with Fed’s 2% target.
- Manufacturers and service providers report election uncertainty dampening investment and hiring.
- Increased input costs linked to rising raw material, shipping, and labour costs.
- Higher costs could lead to higher selling prices or margin squeeze.
Key Events on watch
USA
- 7:30 AM ET Challenger Layoffs for July
- 8:30 AM ET Weekly Jobless Claims
- 8:30 AM ET Continuing Claims
- 8:30 AM ET Nonfarm Productivity for Q2 Prelim
- 8:30 AM ET Unit Labor Costs Prelim Q2
- 9:45 AM ET S&P Global Manufacturing PMI,
- 10:00 AM ET Construction Spending M/M
- 10:00 AM ET ISM Manufacturing PMI for July
- 10:30 AM ET Weekly EIA Natural Gas Inventory
Global
- China Caixin Manufacturing PMI,
- BoE Policy Decision,
- US Jobless Claims,
- Canada Manufacturing PMI,
- US ISM Manufacturing PMI.
Friday –Aug 02
Swiss CPI Expectations
- Market assigns 75% probability of rate cut due to softer CPI report.
- Y/Y expected at 1.3%, M/M at -0.2%.
- SNB cut interest rates by 25 bps to 1.25%.
- Expected inflation to average 1.5% in Q3.
- Market predicts another rate cut in September if inflation undershoots expectations.
US NFP Expectations
- Expected 175K jobs added in July vs. 206K in June.
- Unemployment Rate to remain at 4.1%.
- Average Hourly Earnings Y/Y at 3.7% vs. 3.9% prior.
- M/M measure at 0.3% vs. 0.3% prior.
- Fed focused on labour market due to fear of deterioration.
- Fed forecasted unemployment rate to average 4% in 2024.
- Market might increase probabilities for back-to-back rate cuts in November.
Key Events on watch
USA
- 8:30 AM ET Non-farm payrolls for July
- 8:30 AM ET Private Payrolls for July
- 8:30 AM ET Unemployment Rate for July
- 8:30 AM ET Average Hourly Earnings M/M
- 10:00 AM ET Durable Goods Orders M/M for June
- 10:00 AM ET Factory Orders M/M for June
- 1:00 PM ET Baker Hughes Weekly rig count
Global
- Australia PPI,
- Swiss CPI,
- Swiss Manufacturing PMI,
- US NFP
Must read book about investing – check here
The US PPI Y/Y is expected to rise by 2.3%, while the M/M measure is expected to decrease by 0.1%. However, the sentiment will be set by the CPI report.