Key Events in the Week Ahead:US NFP, Jobless claims, BoJ, Fed, and BoE decisions highlight the releases and events.

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

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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.