Investors Brace for a Busy Week of Important Economic Events

 

This week’s economic releases are likely to be overshadowed by important events from the U.S. that includes Fed Reserve’s monetary policy decision, release of the first estimate of second quarter GDP and closely watched Non-farm Payrolls data.

 

FOMC Decision – A busy week of major central bank monetary policy decisions kicks off with the U.S. Federal Reserve’s interest rate decision on Wednesday. The two-day FOMC meeting, scheduled on July 30-31, will be of particular interest and will be one of the most critical events for the Forex market this week. No major policy changes are expected to be announced by the Fed, however, given the recent mixed economic data, Fed’s economic assessment and will be closely scrutinized to seek further clarity on the timing of tapering Fed’s $85 billion a month bond-buying program. FOMC is scheduled to announce its policy decision on Wednesday.

 

U.S. GDP – The government is scheduled to release the advance estimate of U.S. GDP for the second-quarter of 2013 on Wednesday. In the first quarter of 2013, U.S. GDP registered a mediocre growth of 1.8%. Expectations for second-quarter GDP are even lower with consensus estimating the pace of growth in Q2 2013 to ease to 1.1% annualized rate.

U.S. Jobs Report – Market will continue to focus on the monthly jobs report from the U.S. to get further clarity on the labor market condition. The U.S. Fed has already indicated that labor market conditions would play a vital role in its decision to slow the pace of its monthly asset purchase program. The U.S. Labor Department is scheduled to release the monthly jobs for July on Friday. Despite the addition of 195,000 jobs in June, the unemployment rate for the month of June held steady at 7.6%. This time Non-farm payrolls data is expected to show an addition of 180,000 jobs in July, down from 195,000 in June and the unemployment rate is seen dipping to 7.5% from 7.6% in June.

 

Ahead of Wednesday’s key events, important economic data scheduled in the upcoming week’s busy U.S. economic calendar features Pending home sales for the month of June on Monday and Conference Board’s Consumer Confidencefor the month of July on Tuesday. Further, preceding the official monthly jobs report on Friday, private payroll processor ADP is scheduled to release its National Employment Report on Wednesday that shows the number of private-sector jobs created in the month of July. Also, watch-out for ISM Manufacturing PMI, scheduled for release on Thursday, and is expected to show a reading of 52.1 for the month of July.

 

This week’s agenda also includes interest rate decisions by the European Central Bank (ECB) and the Bank of England (BoE) on Thursday. Following the FOMC statement on Wednesday are monetary policy decisions from the European Central Bank (ECB) and the Bank of England (BoE), scheduled on Thursday.

 

Based on recent upbeat Euro-zone economic data, ECB is expected hold its key interest rate at a record low of 0.5%. The main focus of the market would be on the ECB President, Mario Draghi’s press conference, schedule later on Thursday after the rate decision announcement. Draghi’s forward guidance and comments on the state of the economy is likely to have significant effect on the Euro. An upbeat economic outlook could boost the Euro considerably. Also read: EURUSD – likely to trade between 1.3320 – 1.3180

 

Also on Thursday, BoE is scheduled to announce its latest monetary policy decision. Recent economic indicators from the U.K., including the second quarter GDP, were positive, building on expectations from the BoE to keep its key interest rates and asset purchase program (currently at 375 billion Pounds) unchanged. Only if the forward guidance turns out to be dovish, the British Pound could witness weakness in the upcoming week. Also read: GBPUSD – 1.5400 remains important level to be conquered

 

Key economic data to watch from the upcoming week’s Euro-zone economic calendar include the release of Spanish Flash GDP and Gfk German Consumer Climate on Tuesday; German retail sales, German unemployment change and Euro-zone unemployment rate on Wednesday.

 

The upcoming week’s U.K. economic calendar features Manufacturing PMI, scheduled for release on Thursday and Construction PMI, scheduled for release on Friday.

 

Other important global economic data to watch for include official Chinese Manufacturing PMI and HSBC Final Manufacturing PMI, both scheduled for release on Thursday.