Week Ahead

Minutes from the Federal Reserve and European Central Bank will be in the spotlight next week, while policymakers in Australia and Malaysia meet to set interest rates. Elsewhere, worldwide services PMIs will be in focus, as well as inflation rates for China, Brazil, Mexico, Turkey and Russia. Other important releases include US job openings; Canada employment data; UK monthly GDP; Germany factory orders and trade balance; Japan current account; and Australia building permits.

In the US, investors will be waiting for the FOMC minutes due Wednesday for further clarification on the next monetary policy steps. In June, the Federal Reserve signaled it would hike interest rates sooner than expected and revised up its 2021 GDP forecast as the easing of coronavirus restrictions, the rapid pace of vaccination and ongoing government support, continued to boost economic activity. Also, policymakers opened initial talks about a bond-buying tapering.

The ISM Non-Manufacturing PMI survey should signal a near record service activity growth during June, suggesting the world’s largest economy continued to consolidate its recovery amid broader business reopenings. Other notable publications are JOLTs Job Openings, IBD/TIPP Economic Optimism, and the final readings of Markit Services PMI and wholesale inventories.

US financial markets will be closed on Monday in observance of Independence Day.

Elsewhere in America, key data to follow include Canada employment figures and the Ivey PMI survey; Brazil consumer prices, retail trade and Markit Services PMI; and Mexico inflation rate, consumer sentiment and gross fixed investment. The central bank of Mexico is also set to publish its monetary policy meeting minutes.

Across the Atlantic, investors will be following the publication of UK monthly GDP figures, Markit PMI surveys for both services and construction sectors, Halifax house prices and new car sales. Britain’s economy likely grew by 1.7 percent in May, after expanding in April by 2.3 percent as government restrictions affecting economic activity continued to ease.

Elsewhere in Europe, the European Central Bank will be releasing its monetary policy meeting accounts on Thursday, with investors hoping they might provide some clarity on policymakers’ next move. In June, the central bank maintained an accommodative policy stance and revised up projections for the bloc’s economic growth and inflation for 2021 and 2022. On the economic data front, services and construction PMIs for several European countries will be in focus, while other highlights include: Eurozone and Italy retail sales; Germany factory orders, industrial output, investor morale and foreign trade; France, Italy and Spain industrial activity; and the Netherlands, Ireland, Turkey and Russia inflation rates. Poland’s central bank is likely to leave interest rates at record-low levels when it meets on Thursday.

In the Asia-Pacific region, China will publish inflation data and the Caixin Services PMI for June, with forecasts pointing to the fastest increase in consumer prices since September and another solid rise in producer prices, close to May’s near 13-year high. Meanwhile in Japan, the Jibun Bank will be releasing its final reading for June’s Services PMI. Other important releases include current account, Eco Watchers survey and household spending.

The Reserve Bank of Australia will hold its monetary policy meeting, but no changes are expected amid a COVID-19 resurgence. Economic data to follow in Australia include Ai Group services and construction indexes, the preliminary reading of building permits, and the final estimates of retail sales and Markit Services PMI.

Other important data are India Markit services PMI; New Zealand business morale; the Philippines inflation rate; and Malaysia and Taiwan unemployment rates. Policymakers in Malaysia will probably leave interest rates unchanged after the country extended a national lockdown as it faces a new wave of coronavirus infections.

Categories: Markten