Finance 0

Key Events In The Coming Holiday-Shortened Week: Payrolls, Fed Minutes, ISM, G-20

By Kurt Osterberg · On July 3, 2017

In this holiday shortened week, which sees Canada shut to start the week, and US markets close at 1pm on Monday ahead of the July 4th holiday on Tuesday, the focus will be on US Nonfarm payrolls (consensus expect 185k), the FOMC minutes and central bank meetings by the RBA and Riksbank. Traders will also look at June auto sales data, Global Flash PMIs for June, while on the political front, the top event is the G20 summit kicking off in Germany on Friday.

A quick look at the key event: June payrolls: Consensus expects nonfarm payrolls to increase by 185k in June after a weaker-than-expected 138k job gain in May. Some sayd the weak job growth in the prior month could have been due to the early timing of the survey reference period. The unemployment rate should remain unchanged at 4.3% and average hourly earnings may grow by 0.3% mom.

Also watch for FOMC minutes along with Riksbank & RBA: The minutes of the June FOMC meeting are likely to sound more cautious than the statement or press conference. BofA economists signal that the themes to watch are the debate over inflation, the agreement over balance sheet normalization and the discussion on financial conditions. They expect minutes to still point to balance sheet normalization in the September meeting and a path of higher rates.

Two central banks are due this week: This is likely to be another placeholder meeting for the Reserve Bank of Australia (RBA) and policy is set to remain neutral with the cash rate remaining at 1.5%. There looks to be little risk that the RBA will follow other central banks with a hawkish signal. Against the backdrop of normalizing global monetary policy, we remain cognizant that the Riksbank have frequently disappointed in the past and this remains a risk, but their previous insistence on an easing bias is looking increasingly at odds with economic reality and out of step with other major central banks.

In other data:

In the US, we mainly wait for labor market report and FOMC meeting minutes. There will also be ISM and trade balance.

In the Eurozone, releases include retail sales, factory orders and industrial production. We also have final PMI releases where we expect prior readings to be confirmed.

In UK, beyond PMIs, we wait for industrial production, trade balance and house prices.

In Japan, we mainly have confidence indicators.

In Canada, we have PMIs, building permits and labor market data.

In China, key releases include PMI, foreign reserves and consumer inflation

A visual breakdown of the key events across the DM space, courtesy of Bank of America:

Courtesy of DB, here is a breakdown of the key events by day:

Today we’re kicking off in Europe with the final revisions to the June manufacturing PMIs along with a first look at the data for the UK and periphery. Also due out this morning is the Euro area unemployment rate for May. Over in the US this afternoon we’ll also receive the final manufacturing PMI revision along with the manufacturing ISM for June and May construction spending. Later this evening we’ll also get June vehicle sales data.

Tuesday looks to be quiet with Independence Day in the US. The main attraction is likely the RBA meeting overnight while the only data due out is Euro area PPI.

Wednesday looks to be much busier. Overnight in Asia we’ll receive the remaining Caixin PMIs in China and Nikkei PMIs in Japan. In Europe we’ll also get the remaining services and composite PMI revisions as well as retail sales data for the Euro area. In the US on Wednesday data due out includes factory orders for May and the final durable and capital goods orders revisions for May. The FOMC minutes from the June meeting will then be out in the evening.

Turning to Thursday, factory orders in Germany is the only release of note in Europe while in the US we’ll get the June ADP print, initial jobless claims, May trade balance, ISM non-manufacturing for June and the final PMI revisions (services and composite).

We close out the week in Europe on Friday with industrial production in Germany and trade data and industrial production in France and the UK. In the US on Friday it’s all about the June employment report including nonfarm payrolls.