This will be the biggest week in the global financial market this year. This article looks at the biggest stories that will dominate the news.
The Federal Open Market Committee (FOM) will start its monetary meeting tomorrow. The committee will release its decision on Wednesday. Investors expect the Fed to lower interest rates by 25 basis points. Therefore, since this has already been widely reported and advertised, the market will be watching at what the officials signals for the coming meetings. The market is pricing for another 25 basis points cut, which means that rates may end the year at 2.00%. This information will come a few days after data from the US showed that the economy expanded by just 2.1% in the last quarter. This was lower than the 3% target by Donald Trump. Before the Fed meeting, the market will receive the personal income, pending home sales, and consumer confidence data.
US Jobs Numbers
The first Friday of every month is usually known as the Jobs day. This is when the Labor Department in the United States release the data on the number of jobs created in the previous month. This week, investors will receive the employment data. A survey by Bloomberg found that investors expect the economy to add more than 166k jobs in July. This might be a lower number than the 224k jobs created in June.
Bank of Japan and BOE
Bank of Japan officials will start their meeting today. The interest rates decision will be released tomorrow. Investors expect the BOJ to leave interest rates unchanged at -0.10%. The officials are also expected to announce that the rates will likely remain in this level for longer as the country continues to deal with the slowing economy. On Thursday, the BOE officials too are expected to leave interest rates unchanged. Other central banks expected to release their decision are in Brazil and Czech Republic.
Other Economic Data
There will be a bunch of economic data this week. On Tuesday, Japan will release its employment and industrial production numbers ahead of the BOJ decision. France, Austria, Sweden, and Latvia will release their GDP data. Other key data that will be released tomorrow will be:
- Australia building approvals.
- German import and export price index.
- EU service sentiment, consumer confidence, and business climate.
- South African unemployment rate
- US pending home sales
On Wednesday, key data will be the Chinese manufacturing and services PMI data, EU CPI numbers, Japan household confidence and construction orders, Spanish GDP, French CPI, German unemployment rate, EU CPI, and Canadian GDP among others.
On Thursday, key data like Caixin manufacturing PMI from China, Australia export and import price index, Sweden manufacturing PMI, German manufacturing PMI, and ISM manufacturing PMI from the US.
On Friday, Australia will release the retail sales data while Switzerland will release its CPI data. Other key data will be the construction PMI from the UK, EU’s retail sales, and Canadian trade data among others.