Last week, US data points and the FOMC dominated. This week, fundamental risks are spread out, with many central banks in the spotlight. Let’s take a look at the key fundamental risk factors we should be aware of.
Australian Retail Sales m/m June – 0.6%, Forecast: 0.3%, Previous: -0.5%
UK Construction PMI July – Forecast: 62.1, Previous: 62.6
To start the week, Australia releases its June retail sales data, which is expected to rebound from a -0.5% reading in May to around 0.3% in June. The release showed a better-than-expected 0.6% growth helping the AUD stay resilient to start the week.
British Construction PMI for July is expected to be around 62.1, which is slightly lower than the 62.6 level in June.
AUS Trade Balance June – Forecast: -2.00B, Previous: -1.91B
Trade balance, especially the export component has become key recently. Trade balance data released in July showed a dip in exports. In the meantime, RBA gov. Glenn Stevens talked about concerns of the strong Aussie, which could cut down exports. The result: AUD started to slide and has since neutralized the 2014 uptrend.
UK Services PMI July – Forecast: 58.1, Previous: 57.7
Eurozone Retail Sales m/m June – Forecast: 0.4%, Previous: 0.0%
In the European session, UK Services PMI is expected to push higher. Eurozone Retail Sales data is expected to have improved in June compared to May.
US ISM Services PMI July – Forecast: 56.6, Previous: 56.0
US Factory Orders m/m June – Forecast: 0.6%, Previous: -0.5%
US Services PMI is expected to by around 56.6, which would reflect expansion quicker in July than in June. Factory orders are expected to rebound to around 0.6% after a reading of -0.5% for May. Strong factory orders would add to the basket of strong Q2 data, which has eliminated much of the risk of a rate cut to be after mid-2015.
NZ Employment Change q/q Q2 – Forecast: 0.7%, Previous: 0.9%
NZ Unemployment Rate Q2 – Forecast: 5.8%, Previous: 6.0%
New Zealand has been showing strong data, and the jobs data on Wednesday is expected to hold up as well. After a Q1 employment growth of 0.9%, the Q2 employment growth is expected to be around 0.7%. If the unemployment rate drops as expected, we would be getting data that shows the rate hikes working. Once we run through a string of strong economic data, the RBNZ could start reviving the rate-hike campaign, which has been on hold since the last meeting.
UK Manufacturing Production m/m June – Forecast: 0.7%, Previous: -1.3%
A bit outdated now, with limited implications for monetary policy, UK’s manufacturing production data for June is one of of tier 2 or 3 in importance.
CAN Trade Balance June – Forecast: -0.1B, Previous: -0.2B
US Trade Balance June – Forecast: -44.2B, Previous: -44.4B
AUS Employment Change July: Forecast: 13.5K, Previous: 15.9K
AUS Unemployment Rate July: Forecast: 6.0%, Previous: 6.0%
Australian employment change will be one of the key data points for Australia. It needs to see Q3 data heat up before it can consider another rate hike.
BoE Monetary Policy Announcement – The Bank of England has to decide whether it will raise rates late 2014, or early 2015. Lack of wage growth is pushing the bank to consider the 2015 scenario. Let’s see what the tone will be this time.
ECB Monetary Policy Statement and Press Conference – The ECB is holding out on more stimulus for now, but the 0.4% annual inflation print from lat week puts pressure on the bank. However, it is likely not going to do anything yet as it awaits implementation of LTRO.
CAN Building Permits m/m June – Forecast: -1.8%, Previous: 13.8%
US Jobless Claims – Forecast: 305K, Previous: 302K
CAN Ivey PMI July – Forecast: 54.1K, Previous: 46.9 – We can see some CAD resilience after a couple month’s of poor Ivey PMI readings below 50.
RBA Monetary Policy Statement – Will the bank governor, Glenn Stevens bring up concerns again of the strong AUD? If it does, we should expect AUD to be pressured in the short-term, but not likely to reverse its uptrend in 2014.
BoJ Monetary Policy Statement – The Bank of Japan continues to print money and has not shown any indication that it will change its current policy. Any signal that it will slow down printing should pave way for a strong JPY in Q3.
CAN Employment Change July – Forecast: 25.4K, Previous: -9.4K
CAN Unemployment Rate July – Forecast: 7.0%, Previous: 7.1%
Canadian jobs data is expected to have rebounded in July, which should bode well for the CAD especially if the Ivey PMI indeed rebounded as well.
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