- US Independence Day
- OPEC meetings
- US Non-Farm Payrolls
Monday 4th July
It’s a relatively quiet start to the week as the US is closed for its Independence Day holiday. But things pick up later with Non-Farm Payrolls on Friday. Monday’s key data release is the Swiss Consumer Price Index (CPI) which, along with much of the world, has picked up sharply this year. There’s some second order economic data as well in the form of the Australian MI Inflation Gauge, Job Advertisements and Building Approvals. From Japan we have its Monetary Base. From the Euro zone we have the Sentix Investor Confidence survey, Producer Price Index (PPI), Spanish Unemployment, and the German Trade Balance. There’s also a speech from German Bundesbank President Joachim Nagel. From Canada we have the latest update on the Manufacturing PMI and the BOC Business Outlook Survey.
Tuesday 5th July
Overnight sees the latest update on China’s Caixin Services PMI. There’s also Australian Retail Sales and the Reserve Bank of Australia’s (RBA) rate decision. The RBA has proved to be more hawkish than expected recently, having raised its key Cash Rate above market expectations at its last two meetings. Despite this, the Aussie dollar remains out of favour and is currently trading around lows last seen two years ago versus the US dollar. We have a rash of Services PMIs from Spain, Italy, France, Germany, the Euro zone, and the UK. We also have the Bank of England’s Financial stability Report and a speech from Governor Andrew Bailey. Biannual OPEC meetings will take place throughout the day in Vienna, and we also have US Factory Orders.
Wednesday 6th July
The day kicks off with German Factory Orders, EU Economic Forecasts and Euro zone Retail Sales. From the US we have the ISM Services PMI, JOLTS Job Openings and minutes from the last Federal Reserve FOMC meeting. This was where the US central bank rose its Fed Funds rate by 75 basis points, a move that was signalled two days prior to the event via a leak to the Wall Street Journal. Ahead of this deliberate ‘heads-up,’ the market had priced in a 50-basis point increase, so expectations underwent a sudden shift. The minutes could prove highly instructive in terms of any clues committee members may give about future rate hikes, and the ‘terminal rate’ of their key Fed Funds rate. Markets had been pricing in a terminal rate of 4.0%. But that has recently been pulled back to 3.5% which has helped give equity markets a boost.
Thursday 7th July
Overnight we have Leading Indicators from Japan. From the Euro zone we have German Industrial Production and the ECB’s Monetary Policy Meeting accounts. From the US we have Challenger Job Cuts, Weekly Unemployment Claims, the Trade Balance, Weekly Crude Oil Inventories, and the ADP Non-Farm Employment Change. The latter is the precursor to the official Non-Farm Payroll (NFP) report which is released on Friday. Historically, the ADP data, which covers private employment and so excludes public employees, tends to be less volatile than the official numbers. But there have been some surprises recently, with the last two ADP releases undershooting expectations to a significant degree. This is in complete contrast to the last two NFP releases which have comfortably beaten expectations.
Friday 8th July
Overnight we have Japan’s Bank Lending, Current Account, Household Spending and Economy Watchers Sentiment. Later that morning we have the French Trade Balance and Italian Industrial Production. ECB President Christine Lagarde will also speak, a week after Euro zone inflation came in at an all-time high. But the key economic data release for the week is US Non-Farm Payrolls. The US employment picture has continued to be a bright spot in the economy. Ahead of the pandemic, the US unemployment rate had fallen to 3.5%, roughly its lowest level in 50 years. By May 2020 it had jumped to 14.7% with a loss of over 20.6 million jobs in a single month. Now it is once again approaching pre-pandemic levels, with the Unemployment Rate now at 3.6%. Non-Farm Payrolls are now a little over 1 million above pre-pandemic levels, and this is one of the reasons that it is taking a backseat to inflation updates.
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David Morrison is an Analyst with Trade Nation. Trade Nation was set up with the specific remit to help customers realise their trading goals by changing the way they engage with the financial markets. As well as providing full transparency and making sure all customers get a fair deal, Trade Nation is fully regulated. This means customers can be confident they’re getting the trading experience they deserve. Visit www.tradenation.com to find out more
