Week Ahead

The coronavirus will continue to dominate the headlines as well as the second-quarter earnings season, with companies such as IBM, Microsoft, Tesla and Twitter reporting their results. Elsewhere, flash PMI surveys for the US, UK, Eurozone, Japan and Australia will be keenly watched, while central banks in China, Russia, Turkey and South Africa will be deciding on monetary policy. Other key data to follow include: US existing and new home sales, and the weekly jobless report; UK retail trade, business and consumer morale; Eurozone consumer confidence; Japan trade balance and inflation; and South Korea Q1 GDP figures.

The Markit PMI survey for the US is set to highlight the long path to recovery in the world’s largest economy from the coronavirus crisis, with forecasts suggesting the private sector activity rebounded only slightly during July as several states were forced to pause or reverse reopening efforts after a spike in coronavirus cases. Other notable publications include existing and new home sales, Chicago Fed National Activity Index, and the weekly jobless report.

On the corporate front, the second-quarter earnings season continues, with earnings reports to watch including American Express, AT&T, Coca-Cola, IBM, Intel, Microsoft, Novartis, Philip Morris International, Schlumberger, Snap, Tesla, Twitter and Verizon.

Elsewhere in America, key economic data to follow include Canada retail trade, inflation and new housing prices, Mexico mid-month inflation, retail sales and economic activity, and Brazil mid-month inflation.

In the UK, flash Markit PMI numbers are expected to show further signs of a turnaround in the manufacturing activity and to point to the first rise in the service sector output for five months. At the same time, figures from the ONS will most likely signal a renewed recovery in consumption with retail sales rising in June, following a record rebound in May. Investors will also keep an eye on Gfk Consumer Confidence, public sector net borrowing and CBI’s gauges for factory orders and business optimism.

Elsewhere in Europe, flash Markit PMIs for the Eurozone, Germany and France will be in the spotlight, with the bloc’s manufacturing sector set to shrink at the softest pace in the current 1-1/2-year sequence of contraction and the service sector activity to rebound as the economies in the region continued to reopen and the new infection rate remained low. Other key economic data include: the Euro Area flash consumer morale and current account; Germany GfK Consumer Confidence and producer prices; Italy business and consumer survey; Switzerland trade balance; and Turkey consumer confidence. Central banks in Russia and Turkey will be deciding on monetary policy, with Russia policymakers seen slashing interest rates by at least 25 bps.

In Asia, the People’s Bank of China will provide an update on its new loan prime rate (LPR) on Monday, which was set at 3.85 percent on June 22th as the economy recovers from the coronavirus pandemic.

Meanwhile, the Bank of Japan and the Reserve Bank of Australia will publish their monetary policy meeting minutes. Other key data for Japan include flash Jibun Bank PMIs, trade balance and consumer price inflation; while in Australia analysts will be waiting for flash CommBank PMIs.

Other highlights for the Asia-Pacific region include: South Korea second-quarter GDP advance estimate; New Zealand services NZ PSI and trade balance; Malaysia inflation; Thailand foreign trade; and Singapore industrial output and inflation data.

Elsewhere, the South Africa Reserve Bank is seen slashing interest rates by another 25bps when it meets on Thursday, after the inflation rate in May hit its lowest level since 2004 amid a deep economic recession.

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