Economic Calendar Of The Week - July 4-8, 2016

Welcome to the Investors Trading Academy economic calendar of the week. Each week our news analysts review the upcoming economic events that you should be monitoring. It has been a remarkable week. Despite predictions of doom stock markets have rallied impressively, while gold and oil have recovered. It looks like we are in for a period when policy from central banks, especially in the UK, is about to get looser, with policies designed to support markets and economies. Despite all that has happened over the past week, it is important to remember that we are only in the very first stages of the UK/EU discussions relating to the future. The RBA meeting this week should command a lot more attention than usual, since it will be the first G20 central bank to meet since the UK voted to leave. It will set the tone for others later in the month, with of course the Fed, ECB and BoE the most important. A priority now for central bankers is to cushion economies from the adverse effects of the Brexit decision, and we have already seen some of that from the UK. The Fed minutes this week will have to be taken with a pinch of salt given that the discussion took place before the Brexit vote, but the events of the past week will likely have strengthened the hand of those in the Fed and around the world calling for a policy response. Economic data this week focuses on PMI and jobs data. Clearly Friday’s US job numbers will be crucial, and it will be interesting to see if the last, abysmal figure gets revised upwards and if jobs growth rebounded in June. Also of note will be the UK’s services and construction PMI readings, although any post-Brexit shock will be more likely to be seen in next month’s reading. This coming week will be all about central banks. Starting on Monday with the RBA. The Reserve Bank of Australia kept its monetary policy unchanged in June signaling they are in no hurry to cut interest rates any time soon. RBA governor Glenn Stevens stated that the decision to keep rates unchanged supports growth and inflation. Consumer confidence increased as well as the number of job openings. Economists still expect the RBA’s move will be postponed to a later date such as June 2017. Tuesday will focus on a speech from by BOE Governor Mark Carney is due to speak in London about the Financial Stability Report. Carney will probably address the Brexit issue and may provide clues as to the BoE’s next steps. Market volatility is expected. Wednesday will focus on the FOMC Minutes, these are minutes from the Fed’s decision in June, in which it was mostly dovish. The minutes, which are edited until the very last moment, are expected to follow a similar line, especially as the final touch is given after the Brexit vote. No rate hike is on the cards in the next year or so following the latest developments. Thursday will center on BOJ Governor Haruhiko Kuroda will give a speech in Tokyo. Kuroda says that the BOJ does not need to give up its target of 2% inflation despite economists’ criticism that the target is too ambitious to achieve in a short period. The BOJ was unsuccessful in achieving its original goal of turning years of deflation into a stable 2% inflation in about two years, but Kuroda does not believe the Bank should change its monetary policy regarding quantitative easing. Markets will also closely monitor Wednesday payroll data from US provider ADP ahead of Friday’s nonfarm payroll report. US job growth halted unexpectedly in May, with a disappointing gain of 38,000 positions, raising concerns over US economic recovery and the planned rate hike in the summer. Analysts expected a job increase of 159,000. The reading followed a 160,000 rise in the previous month. Meanwhile the unemployment rate declined to 4.7%, the lowest level since November 2007, from 5% in April, but this low reading was due to a 458,000 decline in the number of Americans searching for employment. Nevertheless, the fed still expects to raise rates this year and is closely monitoring the rate of job gains in the coming months. US monthly jobs report for June is forecast to show a 181,000 jobs gain, while the unemployment rate is estimated to rise to 4.8%. By Barry Norman, Investors Trading Academy - ITA