Inflation clearly was the key topic at the ECB forum this week, and will remain in focus in July, as now the key question is how aggressive banks could get. ECB, Fed and BoE confirmed they are now fully focused on fighting inflation, which markets fear will hurt the global recovery. They all suggested they would do what it takes, even at the price of economic growth, because not bringing inflation under control poses a bigger danger to the global economy. Fears that aggressive central bank action will kill off the recovery will continue to intensify and weigh on sentiment. The weekly agenda includes further speeches from ECB, and RBA rate decision, while the US NFP report will be in the spotlight.
Have a look at the most important events of the coming days in our usual weekly publication.
Monday – 04 July 2022
Consumer Price Index (CNY, GMT 01:30) – May’s Chinese CPI is expected to grow by 1.8% from 2.1% on a yearly basis.
Tuesday – 05 July 2022
Interest Rate Decision & Statement (AUD, GMT 04:30) – With the FOMC, BoE, SNB, BoC, RBA and many other central banks now boosting rates (there have been 124 rate hikes so far this year) to address elevated inflationary pressures, fears of a stagflationary environment are increasing, with concerns it will morph into a recession. RBA after their latest meetin that stated that they will do what is necessar” to meet inflation target and coupled with Australia’s hike to the minimum wage, RBA is expected to proceed with 50 bp hikes in July as well as September.
BOE Governon Bailey Speech (GBP, GMT 10:00)
Wednesday – 06 July 2022
RBNZ Statement of Intent (NZD, GMT N/A) – This report includes the RBNZ’s objectives for the next three years and the budget for the first year of that period.
Retail Sales (EUR, GMT 09:00) – Eurozone headline Retail Sales for May are expected to set at 5.4% from 3.9% y/y.
ISM Services PMI (USD, GMT 14:00) –The ISM-NMI index is expected to rise to 56.5 from 55.9 in May, versus an all-time high of 68.4 last November, an 11-year low of 41.8 in April of 2020, and an all-time low of 37.8 in November 2008. We’ve seen a broad seven-month pull-back in the producer sentiment measures from remarkably firm November levels.
FOMC Minutes (USD, GMT 18:00) – The FOMC Minutes report provides the FOMC Members’ opinions regarding the US economic outlook and any views regarding future rate hikes.
Thursday – 07 July 2022
Trade Balance (AUD, GMT 01:30) – The trade surplus for Australia in April was at 10,495 mln.
ADP Employment Change (USD, GMT 12:15) – The key private payrolls number is expected to climb to 200K (a 72k higher on last month’s reading).
Ivey PMI (CAD, GMT 14:00) – A survey of purchasing managers, the Index provides an overview of the state of business conditions in the country.
FOMC Member Bullard Speech (USD, GMT 17:00)
Friday – 08 July 2022
ECB President Lagarde Speech (EUR, GMT 11:55)
Event of the Week – Non-Farm Payrolls (USD, GMT 12:30) – An 310k June nonfarm payroll increase is anticipated. Payroll growth should slow through 2022 alongside reduced growth in the economy. The jobless rate should hold steady for a fourth consecutive month at 3.6%. Hours-worked are assumed to rise 0.3% after the 0.3% gain in May, while the workweek holds steady from 34.6 in March. Average hourly earnings are assumed to rise 0.3%, after a 0.3% May gain, while the y/y wage gain should dip to 5.0% from 5.2%. In the last expansion, we saw a 3.5% peak for y/y wage gains, in both February and July of 2019, before the pandemic-boost to an 8.0% peak in April of 2020. The ensuing strength in wage gains has allowed continued robust y/y increases into 2022, though the return of low-paid workers to the workforce is likely restraining wage gains.
Labour Market Data (CAD, GMT 12:30) – Canada’s unemployment is anticipated higher in June to 5.2% from 5.1%.
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