On Monday 3rd: The Caixin China General Manufacturing PMI, and the US ISM Manufacturing PMI are released.
On Tuesday 4th: The RBA meets on monetary policy and Germany’s trade surplus is due.
On Wednesday 5th: Services PMI’s are due for Japan, China, Spain, Italy, France, Germany, the EU and the UK, plus the FOMC releases its minutes from the last monetary policy meeting.
On Thursday 6th: The Australian Trade Balance, Euro Retail Sales, US ADP Employment Change, US Trade Balance, US ISM Services PMI and US JOLTS Job Openings are all due.
On Friday 7th: Canadian employment data and Ivey PMI are due plus the Nonfarm Payrolls for the US.
Weekly outlook
Investors will have plenty to keep themselves occupied in early July as they await the first major earnings reports due the week following. Highly anticipated US employment data is on the way, and is expected to show that the labor market is still firing on all cylinders despite the efforts of the Fed to slow it down.
Also this week, the Reserve Bank of Australia will convene to determine its interest rates for the coming period. Given the recent statements made by the Bank for International Settlements (BIS)- the organization that represents the world's central banks- it'll be interesting to see which direction the RBA will go this month. The BIS issued a call for additional increases in interest rates worldwide, warning that the global economy had reached a "critical point" as nations struggle to rein in inflation.
Monday 3rd of July
The Caixin China General Manufacturing PMI in May increased to 50.9 from 49.5. Production increased by the most in 11 months, growth in new orders was strong, and sales to international markets kept climbing. When the latest data is released at 1:45 AM GMT, expectations are for a slight dip to 50.4.
In May, the US ISM Manufacturing PMI dropped to 46.9 from April's 47.1. If forecasts for a further loss at 47.2 are correct for the June report, released at 2:00 PM GMT, this would be the 8th straight month of manufacturing sector loss.
Tuesday 4th of July
The Reserve Bank of Australia meets on monetary policy today, with its statement released at 4:30 AM GMT. While leaving the door open for additional tightening last month, the RBA surprised economists with an increase to the cash rate by 25 basis points, bringing it to 4.1%, as inflation remained persistently high and wage growth stepped up. Inflation now having fallen from 6.8% to 5.6%, gives some the confidence that the bank has a reason to pause the tightening cycle for this coming meeting.
Germany's trade surplus increased to EUR 18.4 billion, from a revised EUR 14.9 billion in March, the highest surplus since January 2021. When the latest figures are released at 6:00 AM GMT, expectations are for further growth to EUR 19.1 billion.
Wednesday 5th of July
A host of Services PMI’s are due across the day today particularly across Asia and Europe. The services industry has generally been strong across the board in the wake of the pandemic in contrast to manufacturing. Many of the forecasts are for further growth up and over 50 for June.
The Federal Reserve will release the minutes from its most recent meeting of the FOMC at 6:00 PM GMT. The Fed kept the funds rate target at 5%-5.25% in June, but it hinted that rates could rise to 5.6% by year's end if the economy and inflation do not soften further.
Thursday 6th of July
After underperforming a revised AUD 14 billion rise in March, Australia's trade surplus fell to AUD 11.16 billion in April. As a result of declining exports and increasing imports, the trade surplus shrank to its lowest level since January, but economists expect a slight bump to AUD 11.9 billion when the report is released at 1:30 AM GMT.
Retail sales in April in the Euro Area fell 2.6% from the same month a year earlier, following a revised 3.3% reduction in March in line with expectations as tightening monetary conditions bite into household budgets. The latest figures for May, due at 9:00 AM GMT are forecast to show a further 3.2% drop year over year.
The ADP Employment Change showed that private businesses in the United States created 278K jobs in May, compared to a downwardly revised 291K in April and well above expectations, with the services sector being the primary driver. June data is expected to show an increase of around 180K jobs when it's published at 12:15 PM GMT.
The US trade deficit in April reached a six-month peak of $74.6 billion, compared to $60.6 billion in March. Analysts are looking for a $69.8 billion gap when the report is due at 12:30 PM GMT.
The ISM Services PMI dropped to 50.3 in May from 51.9 in April, indicating that the services sector expanded for the sixth month in a row but at the slowest rate over the period. A slight increase to 50.5 is forecast for the June report due at 2:00 PM GMT.
In April, the JOLTS Job Openings report showed the number of open positions in the United States unexpectedly rose by 358,000 to reach 10.1 million. This latest statistic showed an improvement from the previous month's nearly two-year low of 9.745 million and further confirmed the stubbornly tight labor market. A slight drop to 9.9 million is expected for May at 2:00 PM today.
Friday 7th of July
A collection of employment data for June is due today from Canada at 12:30 PM GMT. The Unemployment rate finally increased to 5.2% in May, after resisting rising interest rates from the BoC for many months. The latest data is expected to show the rate move to 5.4%. Meanwhile, after shedding 17.3K jobs in May, the first decline in nine months, the Employment Change is expected to show 10K less jobs for June.
The US added 339,000 new jobs in May, which was significantly higher than the 190,000 predicted by the market. Numbers for March and April were also revised up, and with the labor market continuing to show resilience, the consensus is for a further 200K jobs added for June when the report is released at 12:30 PM GMT. The Unemployment rate is expected to remain at 3.7%, while Average Earnings growth is potentially dipping from 4.3% to 4.1% year over year.
The Ivey Purchasing Managers Index for Canada in May fell to 53.5 from the previous month's 56.8. Further confirming economic activity in the country is beginning to slow, the forecast for the June numbers, due at 2:PM GMT, is around 52.3.
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