Week Ahead

All eyes turn to the US jobs report due Friday, which will probably point to an acceleration in the labor market recovery; while the earnings season continues, with Berkshire Hathaway, General Motors and Uber due to report their quarterly results. Worldwide PMI surveys will be in the spotlight, as well as monetary policy action by central banks in the UK, Australia, India, Thailand and Brazil. Other releases include trade figures for the US, Canada and China; key factory data for the US, Brazil, France and Germany; Japan’s consumer morale; and Indonesia’s Q2 GDP.

The US jobs report will probably suggest the labor market recovery accelerated in July as the rapid pace of COVID-19 vaccinations allowed the country to continue its re-opening efforts and prompted businesses to hire more workers to respond to growing demand. Markets predict a payroll increase of 900 thousand, which would be the largest rise in seven months; while the unemployment rate is seen falling to 5.7 percent, the lowest level since March 2020. Elsewhere, the ISM PMI surveys for July should point to solid increases in both manufacturing and services sectors. Other notable publications are foreign trade, factory orders, construction spending, ADP employment change, IBD/TIPP Economic Optimism, and the final readings of wholesale inventories and Markit PMIs.

On the corporate front, the second-quarter earnings season continues, with reports to watch including Activision Blizzard, Alibaba, Berkshire Hathaway, General Motors, Roku Inc, and Uber.

Elsewhere in America, key data to follow include Canada employment figures, trade balance, building permits, and Ivey and Markit PMI figures; Mexico business and consumer morale, gross fixed investment and Markit Manufacturing PMI; and Brazil foreign trade, industrial production, and Markit PMIs. Brazil’s central bank will probably raise interest rates by 100 bps when it meets on Wednesday, the fourth rate hike this year, aiming to support the currency and bring inflation back to target.

Across the Atlantic, the Bank of England will be deciding on monetary policy on Thursday, with officials being expected to keep rates on hold and leave the central bank’s bond-buying programme unchanged. Still, investors will turn their attention to the bank’s statement and economic projections, amid signs that a split between the doves and hawks is beginning to emerge on the committee. On the economic data front, Halifax house prices, new car sales and the final figures of Markit PMIs will be in the spotlight.

Elsewhere in Europe, Germany industrial output is set to rebound slightly after two consecutive periods of declines and new orders for manufactured goods are likely to recover from its biggest slump in over a year. Also, investors will keep an eye on the final Markit PMI surveys for the Euro Area, Germany and France while Italy and Spain will publish their preliminary estimates. Other key data include: Eurozone retail sales; France foreign trade and industrial activity; Spain consumer sentiment and unemployment data; Switzerland consumer confidence, CPI and retail trade figures; and Turkey inflation data.

In China, traders will turn their attention to trade balance and Caixin PMI updates for July, with forecasts pointing to a slight slowdown in factory activity growth to four-month low. Meanwhile in Japan, important data to watch for include consumer confidence, household spending, Tokyo CPI, and the final estimates of Jibun Bank PMIs.

Meanwhile, the Reserve Bank of Australia and the Reserve Bank of India will hold their monetary policy meetings, but no changes are expected. On the economic data front, important releases for Australia include Ai Group manufacturing, construction and services indexes, trade balance, building permits, and home loans; while in India flash estimates of foreign trade and Markit PMIs will be in the spotlight.

Other highlights for the Asia-Pacific region include: New Zealand employment figures; South Korea inflation, current account and Markit manufacturing PMI; Indonesia first-quarter GDP data; and Thailand, Indonesia and the Philippines inflation rates. Policymakers in Thailand are seen holding interest rates at record-low levels.

Categories: Markten