Events to look out for next week

A quite week is coming up in regards to economic data perspective, but market attention will remain on the geopolitical risks, particularly those stemming from simmering China-US tensions. Focus will be on the r-rate of new coronavirus infections amid the de-restricting in social and economic activity. Election jitters are also showing through, especially given the divergent policies of the two presidential candidates.

Monday – 6 July 2020

ISM Non-Manufacturing PMI (USD, GMT 14:00) – The ISM-NMI index is expected to rise to 47.0 from 45.4 in May and an 11-year low of 41.8 in April. Producer sentiment is extending the May rebounds into June as re-openings expand, after huge April declines due to mandatory closures, on top of the demand hit and oil price drop initially associated with the pandemic. The diffusion indexes are showing a growing numbers of companies that see conditions as being better this month than last month, even if the level of activity remains depressed.

Tuesday –  7 July 2020

Event of the week – Interest rate Decision and Statement (AUD, GMT 04:30) –Australia in recession for the first time in 29 years. Australia GDP contracted -0.3% q/q in the first quarter of the year, as the economy was hit by bushfires and the first impact of the virus outbreak in China. The second quarter will of course be much worse as the pandemic spread and lockdowns came into effect. Hence officials expected to leave monetary policy unchanged at its July statement, which maintained the cash rate at 0.25%, signalling that “the accommodative approach will be maintained as long as it is required.” as they also stated in June.

Wednesday – 8 July 2020

European Commission releases Economic Growth Forecasts(EUR, GMT 09:00) –  DG ECFIN produces various economic forecasts on behalf of the European Commission which differ in terms of their coverage and time horizon.

Thursday – 9 July 2020

Eurogroup Meeting

Consumer & Producer Price Index (CNY, GMT 01:30) – The June’s Chinese CPI is expected to have improved on a monthly and yearly basis, with a slight higher outcomes at -0.5% m/m from -0.8% m/m and a 2.7%y/y from 2.4%y/y respectively.

Jobless Claims (USD, GMT 12:30)– The improvement in claims continues to fall short of the rebound we’re seeing in NFP the week ended 3rd July, which rose 4,800k in June, as the claims data continue to lag the rebound evident in most available supply and demand measures for the economy. Initial claims are averaging 1,501k in June, versus higher prior averages of 2,321k in May, 4,572k in April, and 3,048k in March, but a lower 214k in February and a cycle-low 211k in January.

Friday – 10 July 2020

Labour Market Data (CAD, GMT 12:30) – Canada’s employment improved 289.6k in May, contrary to expectations for another drop following the -1993.8k collapse in April. The unemployment rate rose to 13.7%, a record high. Overall, the easing of restrictions saw business bring employees back following layoffs, add new workers and add more hours for existing workers. This report, alongside the equally surprising gain in US employment during May, provides a strong indication that the recovery of the economy was underway in May following the collapse in April. Granted, there is still a long way to go (the unemployment rate is at a record high), but the net gain in employment during May was a welcome bit of positive news after the recent run of dismal data.