Today Americans celebrate Independence Day, so we will wait until the next few days for important data from the US economy. On Wednesday, the minutes of the Federal Reserve's last meeting will be published, and on Friday we will learn key data from the labor market. And these are the events that markets can live by this week.
After a tumultuous first half of the year, investors may continue to look for signs of a potential recession as interest rates rise around the world. In early July, the market became so spooked by the collapse of the economy that it began to price in the possibility of a 0.75 percentage point interest rate cut in 2023 in the United States. These expectations may be influenced by Friday's release of labor market data and the minutes of the last FOMC meeting, where it was decided to raise interest rates by 0.75 pct. Investors may also pay attention to: comments from ECB President Christine Lagarde, the RBA's decision on interest rates, or the release of China's services PMI and inflation data.
Friday's non-form payrolls report may show that the U.S. economy added 270,000 jobs in June, the fewest since last April. The unemployment rate is expected at 3.6 percent and wage growth at 0.3 percent on a monthly basis.
The FOMC meeting minutes and speeches by several Fed officials may contain clues to the size of the July interest rate hike, by 50 or 75 basis points.
In Europe, the focus will be on comments from ECB policymakers, including President Lagarde, and the minutes of the ECB's last monetary policy meeting. Investors may look for clues as to how aggressively the central bank will approach raising interest rates after the summer. Also ahead are important economic releases on PMI for services, PPI for the Eurozone and retail sales, Germany's trade balance, factory orders and industrial production.
On the UK economic calendar, traders can look out for speeches from several Bank of England policymakers, including Governor Andrew Bailey, and the central bank's financial stability report on Tuesday.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service)
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