Week Ahead

After a turbulent first half of the year, investors will continue to look for signs of a potential recession as interest rates around the globe increase. The US jobs report and FOMC minutes will take center stage next week but comments from ECB President Lagarde, the RBA interest rate decision and China services PMI and inflation will also be keenly watched.

In the US, investors’ attention will turn to the nonfarm payroll report, which is expected to show the American economy added 270K jobs in June, the least since April last year. The unemployment rate is seen steady at 3.6% as well as wage growth at 0.3%. FOMC minutes and appearances from several Fed officials will also be keenly watched for more clues on the size of July’s rate hike, either 50 or 75 bps. Other economic data to follow include factory orders, the ISM Non-Manufacturing PMI, JOLTs job openings, ADP report, Challenger job cuts, trade balance and consumer credit. US stock and bond markets are closed on Monday for the Fourth of July holiday.

Elsewhere in America, it will be interesting to follow: Canada unemployment, exports, imports and S&P Global manufacturing PMI; Brazil inflation, services PMI and industrial production; and Mexico inflation rate.

The economic calendar is relatively light in the UK, but traders will pay special attention to appearances from several BoE policymakers, including Governor Andrew Bailey and the central bank’s Financial Stability Report on Tuesday. On the data front, final S&P Global services PMI and Halifax house prices will be in the spotlight.

In Europe, comments from ECB policymakers including President Lagarde and minutes from the ECB’s last monetary policy will take center stage, as investors seek for more clues on how aggressive the central bank will be with raising interest rates after July. Meanwhile, important economic releases include services PMIs; Eurozone PPI and retail sales; Germany balance of trade, factory orders and industrial production; and inflation figures for Russia, Turkey and Switzerland.

In China, the release of services PMI for June will offer a glimpse into how well service providers have been since the lifting of stringent lockdowns in major cities, while inflation data will also be published.

In Australia, all eyes will be on the RBA which is expected to raise interest rates by another 50bps to 1.35%. A batch of indicators, namely foreign trade, retail sales, building permits, and new home loans, as well as business surveys for the service sector are also due.

In Asia, investors will follow Japan services PMI, household spending and current account; inflation rates for South Korea, the Philippines, and Taiwan; and central bank meetings in Malaysia and Israel, where borrowing costs are seen rising by 25 bps and 50 bps, respectively.