This Week in Market 1-5 August 2022
Data focus point:
- Reserve Bank of Australia Rate decision
- AU Trade Balance
- Bank of England rate decision
- US Non-Farm Payrolls
- US – ISM Manufacturing & ISM Service
- Trade Balance
- NZ JOBS Q2
- GE Industrial Production
- CAD Jobs & IVEY PMI
The July labor report, speeches by numerous Fed officials, the ISM Manufacturing and Non-Manufacturing PMIs, and earnings releases will be the main topics of discussion in the US during this busy week. Investors will be watching the monetary policy decisions made in the UK, Australia, Brazil, and India among other countries.
The NFP report, which is projected to indicate that the American economy added 250K jobs in July—the fewest since a decrease in December 2020—is the focus of attention the next week. This could be a warning that hiring may be slowing down. The unemployment rate is projected to remain constant at 3.6 percent, the lowest level since February 2020, while salaries are predicted to expand slightly more slowly. Additionally, traders will pay particular attention to the presence of numerous Fed officials for additional cues regarding the size of the September rate hike.
Eli Lilly, Gilead Sciences, Uber, Caterpillar, and Amgen are just a few of the 148 S&P 500 firms that have released their quarterly results as the earnings season continues. The final S&P Global PMIs, the ISM Manufacturing and Non-Manufacturing PMIs, exports, imports, Challenger job cuts, construction spending, JOLTS job vacancies, and factory orders are further significant economic indicators.
It will be noteworthy to watch the PMIs for Canada, the trade balance, and the unemployment rate; the trade balance, industrial production, S&P Global PMIs, and the central bank’s monetary policy decision; and the PMI for Mexico.
Markets are split between a 25 basis point hike and a 50 basis point increase, which the Bank of England’s monetary policy committee will go with. In order to control inflation, which is quickly approaching the two-digit level, and prevent a too-severe slump, the BoE must decide how far its monetary policy should be tightened. Since 1992, July saw the biggest annual increase in consumer prices (9.4 percent). On the front of economic data, investors are keenly expecting the final PMIs, as well as the Halifax house price index and national home prices.
In other parts of Europe, industrial production is anticipated to decline in Germany, France, and Italy, while retail trade growth in the Euro Area is likely to have slowed by the end of the second quarter, especially in Germany. The unemployment rate in the Eurozone is anticipated to stay at a record-low 6.6 percent in June.
Additional information will be released on producer inflation in the Euro Area, the balance of trade and factory orders in Germany, the unemployment rates in Italy and Spain, the inflation rate, consumer confidence, and manufacturing PMI in Switzerland, as well as consumer and producer prices in Turkey. Investors will also be watching the final S&P Global PMI releases for the Euro Area, Germany, and France as well as the preliminary estimates for France, Italy, and Spain.
The manufacturing and service sectors’ post-lockdown rebound will be closely watched in China as the July PMI readings and the second-quarter current account data are both reported. Following a little weaker rise in the headline inflation rate last quarter, which has boosted odds for a rate hike of 50 basis points, attention in Australia will be on the central bank’s interest rate decision.
The second quarter job data in New Zealand’s neighbor is anticipated to reveal a tightening labor market, with employment rising by 0.4 percent and the jobless rate falling to a new all-time low of 3.1 percent. Due to the fact that inflation has remained constant at 7 percent, which is more than the Reserve Bank of India’s target ceiling of 6 percent, the central bank in India will likely decide to increase borrowing costs for the third time in a row at its upcoming meeting. In other news, Q2 GDP figures for Hong Kong and Indonesia will be released, and they will join South Korea and the Philippines in reporting July inflation data.
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