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The Week Ahead: The BoE, the BoJ and the FED are in Action in a Busy Week
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It's a big week ahead, with the BoJ, the BoE, the FED in action. It's also nonfarm payrolls and there are corporate earnings and trade talks to consider.
On the Macro
For the Dollar:
It’s a particularly busy week ahead on the economic data front.
The FED’s preferred Core PCE Price Index and July CB Consumer Confidence numbers are due out on Tuesday. Personal spending will also need to provide support on the day.
While we can expect the Greenback to find direction, the focus will remain on Wednesday’s FOMC interest rate decision.
Will it be a 25 basis point cut or more? ADP nonfarm employment change figures and Tuesday’s numbers could influence.
On Thursday, Manufacturing sector PMI numbers will be in focus, with the ISM Manufacturing PMI the key driver.
At the end of the week, wage growth and nonfarm payrolls will round off a busy week.
Of less influence will be June factory orders and finalized consumer sentiment numbers due out on Friday.
The Dollar Spot Index ended the week up by 0.88% to $98.01.
For the EUR:
It’s a particularly busy week ahead.
Key stats in the week include German consumer sentiment, retail sales, and employment numbers due out on Tuesday and Wednesday.
French GDP and consumer spending figures due out on Tuesday and Eurozone GDP numbers on Wednesday will also have an impact.
On the inflation front, prelim July figures through the week will need to be tracked, though any uptick is unlikely to have a material impact on ECB monetary policy near-term.
Spain and Italian manufacturing PMIs will also influence on Thursday.
Of less influence on the week will be Spanish GDP numbers on Wednesday.
Following last week’s ECB press conference, the Eurozone’s unemployment and retail sales figures due out on Wednesday and Friday will be significant. Barring material deviation from prelims, however, French and German manufacturing PMIs will likely have a muted impact on Thursday.
The EUR/USD ended the week down by 0.83% to $1.1128.
For the Pound:
It’s a relatively busy week ahead for the Pound. On the data front, key stats are limited to July’s manufacturing and construction PMI’s due out on Thursday and Friday.
While we can expect both sets of numbers to influence, the focus will be on the MPC on Thursday. Carney’s press conference and any dissent will have the greatest impact.
There’s been a lot of confusion over what lies ahead on the monetary policy front. Brexit remains the key uncertainty, but with global trade terms deteriorating, will the BoE make a surprise move?
Outside of the numbers, any Brexit chatter will also need to be considered along with any military action in the Middle East.
The GBP/USD ended the week down 0.94% at $1.2384.
For the Loonie:
It’s another quiet week ahead.
May GDP numbers due out on Wednesday and June trade figures due out on Friday will have the greatest influence.
We can expect the markets to brush the June RMPI that are due out on Wednesday alongside the GDP numbers.
Outside of the stats, market sentiment towards the global economy will influence crude oil prices and the Loonie.
The Loonie ended the week down 0.82% to C$1.3166 against the U.S Dollar.
Out of Asia
For the Aussie Dollar:
It’s a particularly busy week ahead.
On the data front, 2nd quarter inflation and private sector credit figures due out on Wednesday will get things going. July manufacturing index numbers on Thursday will also influence ahead of wholesale inflation and retail sales figures due out on Friday.
We will expect 2nd quarter inflation and retail sales figures to be the key driver in the week.
Of less influence will be building approval and house price numbers in the week.
From elsewhere, China’s July private sector PMIs due out on Wednesday and Thursday will also influence. Disappointing numbers could have a muted impact, however, should trade talks progress well on the week.
The Aussie Dollar ended the week down by 1.86% to $0.6911.
For the Japanese Yen:
It’s a relatively busy week ahead.
Economic data includes June retail sales figures due out on Monday and prelim June industrial production figures due out on Tuesday.
Of less influence on the week will be June jobs/applications ratio numbers due out on Tuesday.
On the monetary policy front, the BoJ will deliver its policy decision on Tuesday. Expect some talk of further easing, assuming there’s no action on the day.
Through the week, chatter from Beijing and the U.S on trade, Brexit, corporate earnings and the FED will also be a factor. Expect China’s private sector PMIs to also influence market risk appetite.
The Japanese Yen ended the week down 0.90% to ¥108.68 against the U.S Dollar.
For the Kiwi Dollar:
It’s a particularly quiet week ahead.
Economic data is limited to June building consent figures due out on Tuesday and July business confidence numbers due out on Wednesday. We can expect the Kiwi to be particularly sensitive to the business confidence numbers.
Outside of the stats, expect sentiment towards FED monetary policy and any updates from the U.S – China trade talks to also influence.
The Kiwi Dollar ended the week down 1.89% to $0.6636.
Out of China:
Key stats due out in the week include private sector PMI numbers that are due out on Wednesday and Thursday respectively.
Expect the manufacturing PMI numbers to have a material impact, through service sector numbers would need to hold steady.
Outside of the stats, updates from the U.S – China trade talks will also be a key driver in the week.
Geo-Politics
Trade Wars: Face to face trade talks are set to resume. We expect updates to have a material impact on the global financial markets. Economic data in key geographies have raised the alarm bells and central banks are acting. Failure to find a resolution will be troubling for the market bulls.
UK Politics: The UK Parliament is now in summer recess until the 1st week of September. Any chatter from new British Prime Minister Johnson and the EU will need to be monitored.
Iran: Things have heated up since the missile test. Will there be face to face dialogue in Tehran or a clash in the Gulf?
The Rest
The BoJ: Will be the BoJ jump the gun on Tuesday and deliver further easing or look to follow the FED’s signals.
The BoE: In the wake of the FED interest rate decision, BoE Gov. Carney could signal an imminent rate cut. While few expect the BoE to make a move on Thursday, a dovish press conference is expected.
The FED: All bets are on a 25 basis point rate cut. Anything larger or smaller will impact as will the FOMC Statement. It could ultimately boil down to whether it’s a dovish or hawkish rate cut on Wednesday.
Earnings: It’s another big week ahead… Earnings releases and outlooks will not just influence the U.S majors, but risk appetite across the global financial markets.
Corporate America:
Tuesday, 30th July
- Apple Inc.
- Facebook Inc.
- General Electric Co.
- Pfizer Inc.
- Procter & Gamble Co.
Thursday, 1st August
- General Motors Co.
- Kraft Heinz Co.
- United States Steel Corp.
Friday, 2nd August
- Chevron Corp.
- Exxon Mobil Corp.
Corporate Germany
Thursday, 1st August
- BMW AG
- Infineon Technologies AG
- Siemens AG
Friday, 2nd August
- Allianz SE
About the Author
Bob Masonauthor
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.
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