As we head into the first week of the month, the NFP report will hog the limelight, especially after the big negative surprise of the month before. Reserve Bank of Australia will have its policy meeting while the eyes remain firmly focused on the UK and Eurozone’s releases after Brexit. The UK financial stability report will be published on Tuesday and will be very interesting for the traders. The euro is mainly prone to ECB President Draghi’s speech on Wednesday.
On [B]Monday [/B]morning traders’ attention will be on UK PMI construction for June as the index is forecasted to fall for the third straight month in June at 50.5 from 51.2 before. It worth to mention that in last September the index was at 60.0.
Meanwhile, Eurozone Sentix Investor confidence for July and producer price index for May will be released. In Canada, BoE will publish its business outlook survey following June’s RBC Manufacturing PMI. Later in the day, New Zealand’s business confidence for the second quarter is expected. Overnight the Reserve Bank of Australia will revise its monetary policy. Even though no changes are expected to the 1.75% benchmark interest rate, the rate statement will be closely watched by investors for clues how Brexit affected the Australian economy.
[B]Tuesday [/B]is a Markit PMI day. The Markit services PMI from Eurozone, Germany and UK are scheduled for release. In Eurozone, the services sector is predicted to meet the first estimates of 52.4 while in UK is expected to enter a slower phase of growth at 52.6 in June versus 53.5 before. Eurozone’s retail sales are forecasted to have risen by 0.3% in June compared to a flat month before.
Afterwards, the Financial stability report of UK which is likely to hog the limelight especially after Britain’s vote to leave the European Union and rating agencies move to downgrade the credit rating of BoE and other major UK-based banks. In U.S. just a few economic indicators are coming out which are unlikely to stoke much interest if we don’t see big changes. The scheduled indicators are the IBD/TIPP economic optimism for July and the factory orders for May. In New Zealand, the Fonterra dairy auction will take place.
On [B]Wednesday[/B], the majority of the economic news is coming from U.S. Early in the morning, a non-monetary policy’s ECB meeting will take place while the ECB President Mario Draghi will give a speech conference. Afterwards, the attention will be turned to U.S. The ADP employment change will be closely eyed, two days ahead of the Non-farm payroll report for June. The analysts expect the U.S. private sector to have added 150k jobs in June, the lower number of jobs since April 2013.
The U.S. trade balance for May is also coming out following by many others market affecting indicators. The U.S. services sector is expected to rise at 51.5 in June from 51.3 before according to the Markit PMI. The ISM Non-manufacturing PMI is also expected to pick up at 53.3 versus 52.9 the previous figure. Traders will keep a tab for the FOMC minutes that are scheduled for publication at 18:00 GMT time. Overnight, the Bank of Japan Governor Kuroda will give a speech.
On [B]Thursday [/B]the day starts with the UK Halifax house prices for the three months to June which is expected to show that the house prices increased 7.7% versus an increase of 9.2% the three months to May. Later on, important indicators are coming out in the UK. The industrial production is expected to have risen 0.5% yoy in May following a significant increase of 1.6% in April, after some weak months. The same indicator compared to the month before is predicted to have slowed down 0.9% versus a sharp 1.6% rise in April. The manufacturing production is expected to rise 0.8% for the second month in a row following 10 consecutive months of contraction.
Next, the ECB policy meeting accounts will be published. A while later, the U.S. jobless weekly claims will be released as usual as well as the JOLTS job openings for May. In the European afternoon, UK will publish the NIESR GDP estimate for the three months to June. No forecasts are available yet. During the Asian session, Japan will announce its trade balance and the labor cash earning both for May.
[B]Friday [/B]is an NFP day! Following the surprise of the last release, investors will be more cautious for this one. The report is expected to show that the U.S. economy gained 180k non-farm jobs in June. The previous month, the U.S. jobs report disappointed the market participants and decreased sharply the odds for a rate hike. The headline non-farm payroll number came out 38k by far below forecasts of 164k in May. The unemployment rate is predicted to rise back at 4.8% versus the 6-year low 4.7% of May. In addition, the average hourly earnings for June are expected to have risen 0.2%, as the month before.