US
It will be an eventful week, the ISM manufacturing report, the fourth of July Holiday, the Fed Minutes, and the nonfarm payroll report. Wall Street is starting to believe in those Fed dot plots and this week’s economic data points may provide more evidence for the hawks. The ISM manufacturing report is expected to show activity is stabilizing. The Fed minutes will emphasize the fear that core inflation is proving to be stickier. The June US jobs report is expected to show hiring cooled from the 339,000 pace to 200,000 jobs. The unemployment rate however is expected to improve from 3.7% to 3.6%. Wage pressure is also expected to remain steady with a 0.3% increase from a month ago.
We will hear from a couple of Fed speakers this week. Williams participates in a moderated discussion at the 2023 annual meeting of the Central Bank Research Association at the New York Fed. Logan speaks on a panel about the policy challenges for central banks at the Central Bank Research Association annual meeting at Columbia University.
Eurozone
Eurozone inflation data on Friday was very promising and while it likely won’t influence whether the ECB hikes or not in July – Lagarde previously strongly hinted they will – if followed by further signs of disinflation over the summer, it could see the central bank consider a pause in September.
Next week is a little short of tier-one releases but final PMIs on Monday and Wednesday will be of interest, as will another appearance by ECB President Christine Lagarde on Friday.
UK
Very little data of note next week with final PMIs the only highlight. That aside, central bank speak will be followed closely although in the absence of better inflation data, their hands are seemingly tied. The real question ahead of the next meeting is whether they’ll hike by 25 basis points or 50 again.
Russia
A relatively quiet week with PMIs on Monday and Wednesday as the only notable releases. That aside there’s the Russian central bank financial congress on Thursday and Friday so we may hear from Governor Elvira Nabiullina.
South Africa
The whole economy PMI is the only notable economic release or event next week.
Turkey
With the CBRT pivoting toward more conventional monetary policy in the aftermath of the election, the economic data becomes increasingly relevant and next week we’ll get June inflation numbers on Wednesday. The CPI is expected to remain close to 40% but with the currency in freefall, the inflation outlook is likely to get worse before it gets sustainably better. The central bank has stepped back from burning through reserves to support the lira and effectively pay for bad policy choices and that has sent the lira to record lows, falling more than 20% in the last month, alone.
Switzerland
CPI inflation data on Monday is expected to show the headline rate falling back below 2% to 1.8% in June. Markets are still pricing in a 25 basis point hike in September at the moment but that may change if the data matches expectations and, importantly, remains below 2%. Unemployment is also released on Friday.
China
Another set of lackluster data seen on the official NBS manufacturing and non-manufacturing PMIs for June released on Friday. Manufacturing activities continued to contract for the third consecutive month at 49 and growth in the services sector decelerated to a 5-month low at 53.2 from 54.5 in May.
The focus will now turn to the Caixin manufacturing PMI which consists of small and medium enterprises out on Monday. Markets are expecting almost an unchanged condition of 50.2 for June versus 50.9 recorded in May.
The Caixin services PMI will be released on Wednesday with a forecasted slowdown in growth to 56.5 for June from 57.1 in May. Time is running out for the implementation of fresh fiscal stimulus measures.
India
The manufacturing PMI is released on Monday, where the consensus is expecting a slight growth slowdown to 58 for June from 58.7 in May, its strongest reading since October 2020.
A similar trajectory is anticipated for the services PMI on Wednesday where growth is expected to dip to 60.2 in June from 61.2 recorded in May, a continuation of consolidation from April’s near 13-year high of 62.
Australia
The key highlight for this week will be RBA’s monetary policy decision on Tuesday. The consensus is calling for another 25 basis points hike on the cash rate, bringing it to 4.35% after recent hawkish guidance inferred from the minutes of the prior meeting.
However, the interest rates futures market has implied a reduction in the odds of a 25 bps hike due to the recent softer-than-expected annualized monthly CPI data for May; 5.6% from 6.8% in April and below expectations of 6.1%. As of 29 June, the ASX 30-day interbank cash rate futures has priced in a 28% chance of 25 basis points (bps) hike on the cash rate, down from a 53% chance priced two weeks ago on 16 June.
On Thursday, we will have the balance of trade for May where April’s surplus of A$11.16 billion is expected to narrow to A$10.5 billion. If it turns out as expected, it will be the narrowest trade surplus since August 2022.
New Zealand
No key data.
Japan
A slew of key sentiment data to keep a lookout for this week. On Monday, big manufacturers, and non-manufacturers sentiment gauges for Q2; the Tankan Large Manufacturers Index is expected to improve to 3 from 1 recorded in Q1. Likewise, a similar improvement is expected on the Tankan Large Non-Manufacturing Index to 22 from 20 in Q1.
On Friday, the attention turns to consumers; household spending for May is expected to see an improvement, a jump to a growth of 0.5% month-on-month from -1.3% recorded in April. On a year-on-year basis, a narrower contraction is expected at -2.4% for May from -4.4% in April, its steepest decrease since June 2021.
Singapore
Several key data to focus on. On Monday, the preliminary URA property index for Q2 where its red-hot growth is expected to dip slightly to 2.9% quarter-on-quarter from 3.3% in Q1. The manufacturing PMI for June is released on Monday as well and is forecasted to improve slightly to 50 from 49.5 in May. If it turns out as expected it put a halt to its prior three months of contraction.
Lastly, growth in retail sales for May is expected to slow to 2.8% year-on-year from 3.6% recorded in April; a potential three consecutive months of growth slowdown.
Economic Calendar
Saturday, July 1
Economic Data/Events
Deadline for Wagner Group fighters to sign contracts with Russian Defense Ministry
Sunday, July 2
Economic Events
Pakistan Foreign Minister Zardari meets Japanese counterpart Hayashi in Japan
Monday, July 3
Economic Data/Events
US construction spending, ISM Manufacturing, light vehicle sales
Australia building approvals, Melbourne Institute inflation gauge
China Caixin manufacturing PMI
Eurozone final manufacturing PMI
France manufacturing PMI
Germany manufacturing PMI
India manufacturing PMI
Japan Tankan economic survey
New Zealand building permits
Singapore home prices, official PMI
UK Manufacturing PMI
Canada Day national holiday.
Thailand’s newly elected parliament to convene
ECB’s Nagel to speak in Frankfurt
Tuesday, July 4
Economic Data/Events
US Independence Day national holiday. Financial markets closed
RBA interest rate decision: Expected to raise rates by 25bps to 4.35%
Mexico international reserves
Spain unemployment
Wednesday, July 5
Economic Data/Events
FOMC issues minutes on June policy meeting
US factory orders
China Caixin services and composite PMI
Eurozone services PMI, PPI
France industrial production
Russia GDP
Singapore retail sales
Spain industrial production
Thailand CPI
The 8th OPEC International Seminar
Bundesbank symposium
ECB’s Villeroy speaks at the Paris Europlace forum
Fed‘s Williams is part of “fireside chat” at the annual meeting of the Central Bank Research Association (CEBRA) at the New York Fed
Thursday, July 6
Economic Data/Events
US initial jobless claims, trade, June ISM services index: 51.2e v 50.3 prior, job openings
Australia trade
Eurozone retail sales
Germany factory orders
Poland rate decision: Expected to keep rates steady at 6.75%
Taiwan CPI
Bloomberg Conference on “Foreign Direct Investment: Scaling New Heights” in London
Bank of Russia Governor Nabiullina takes part in the bank’s financial congress in St. Petersburg
Fed’s Logan speaks on a panel about the policy challenges for central banks at CEBRA meeting
Friday, July 7
Economic Data/Events
US June Change in nonfarm payrolls: 200Ke v 339K prior, unemployment rate: 3.6%e v 3.7% prior, Average Hourly Earnings M/M: 0.3%e v 0.3% prior
Canada unemployment
Chile copper exports, CPI, trade
China forex reserves
France trade
Germany industrial production
Japan household spending
Mexico CPI
ECB’s Christine addresses the REAIX 2023 “Renewing Hope” event in Aix-en-Provence, France
ECB’s de Guindos speaks at a workshop on “Examining the inflationary surge affecting economies around the world,” organized by King’s College in London
BOE’s Mann on a panel at the CEBRA meeting in New York
Sovereign Rating Updates
Hungary (S&P)
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