This week’s economic releases will be crucial for shaping market sentiment. A dovish tilt from central banks and signs of a softening US labor market could trigger a rally in bonds and equities, while a stronger-than-expected jobs report could dampen hopes for Fed rate cuts and boost the US dollar.
Key Events:
- Central Bank Decisions: Both the European Central Bank (ECB) and the Bank of Canada (BoC) are expected to cut interest rates this week. The ECB meeting is on Thursday, while the BoC meets on Wednesday.
- US Jobs Data: The highlight of the week will be the release of US non-farm payroll data on Friday. This report will provide insights into the health of the US labor market and could influence the Federal Reserve’s (Fed) future policy decisions.
- Other US Data: A flood of US economic data is scheduled for release throughout the week, including inflation data, manufacturing and services PMI figures, and ADP employment numbers.
Day to Day Breakdown:
- Monday:
- US ISM manufacturing PMI data
- Tuesday:
- US JOLTs job openings data
- Wednesday:
- Bank of Canada rate decision (rate cut expected)
- Australian GDP data
- US ADP non-farm employment change data
- US ISM non-manufacturing PMI data
- Thursday:
- European Central Bank rate decision (rate cut expected)
- UK construction PMI data
- Canadian Ivey PMI data
- Friday:
- US non-farm payrolls data (key employment report)
- US average hourly earnings data
- US unemployment rate data
- Canadian employment data
What to Watch:
- Will the BoC and ECB actually cut rates? While a rate cut is widely expected from both central banks, there’s still some uncertainty, particularly regarding the BoC. Investors will be looking for clues in the accompanying statements and press conferences.
- How will the US jobs data impact the Fed? A strong jobs report could dampen hopes for a rate cut from the Fed later this year. Conversely, a weak report could strengthen the case for easing.
- What will the ECB signal about future rate cuts? ECB President Christine Lagarde’s press conference and the bank’s new Staff Projections will be closely watched for any hints about the pace of future monetary policy changes.
Categories: Market News
