- Interest rate Decision and Statement (JPY, GMT 02:00) – Low for longest award goes to the BoJ. The BoJ doubled down on dovishness by axing the timeframe for a return to 2% inflation. Indeed, non-conventional policy is now conventional. BoJ is expected to maintain its current extraordinary level of stimulus as they wait and see how global growth progresses this year. The BoJ has warned that chronic ultra-accommodative policy “could destabilize the financial system,” although these risks were not judged to be significant at the present juncture.
- Harmonized Index of Consumer Prices (EUR, GMT 12:00) – The German HICP inflation is expected to slip back to 1.3% y/y for July after it was revised up to 1.5% y/y in June.
- Consumer confidence (USD, GMT 14:00) – Consumer confidence is expected to bounce to 128.0 in July from 121.5 in June, versus another 16-month low of 121.7 as recently as January and an 18-year high of 137.9 in October. Overall, confidence measures remain historically high.
Wednesday – 31 July 2019
- Consumer Price Index (AUD, GMT 01:30) – Australian Q2 CPI is expected to rise to 0.2% after confirmed at 0.0% q/q for Q1 2019.
- Consumer Price Index (EUR, GMT 09:00) – The Euro Area CPI for July is expected to slow down slightly, at 1.2% y/y from 1.3% y/y last month. The annual rate is still below readings seen in the first quarter of the year and far below the 2% limit for price stability, thus giving the doves at the ECB something to argue with. Core inflation is expected to release at 1.0% y/y.
- ADP Employment Change (USD, GMT 12:15) – Employment change is seen spiking to 153k in the number of employed people in July, compared to the 102k reading seen last month.
- Gross Domestic Product (CAD, GMT 12:30) – The 0.1% gain that is expected for May GDP will keep Q2 GDP on track to come in near the BoC’s 2.3% Q2 GDP estimate, as the economy rebounds following softness in Q4 and Q1. However, the second half growth outlook is subject to considerable uncertainty, notably from the potential fallout of ongoing trade turmoil and geopolitical tensions on Canada’s exports.
- Interest rate Decision and Conference (USD, GMT 18:00) – Fed expected to cut 25 bps, largely “confirmed” after NY Fed walked back President Williams’ comments. Beige Book for July 30, 31 FOMC reiterated economy continued to expand at “moderate” pace, inflation stable to lower. FOMC Minutes to June 18, 19 meeting said “many” saw significant odds of less favorable outcomes, and nearly all had cut their projections of Fed rate path.
Thursday – 01 August 2019
- Caixin Manufacturing PMI (CNY, GMT 01:45) – The Caixin manufacturing PMI is expected to hold below the neutral zone in July, at 49.6 from 49.4.
- Markit Manufacturing PMI (EUR and GBP, GMT 07:55-08:30) – In July, the German and UK PMI are expected to remain unchanged in the negative region, 45.4 and 49.2 respectively.
- Interest rate Decision and Conference (GBP, GMT 11:00) – The BoE left policy unchanged at the June Policy Committee meeting, leaving the repo rate at 0.75% and QE totals unchanged by unanimous 9-0 votes, as had been widely expected. The same expected to be confirmed in July’s meeting as the BoE has cautioned that the outlook will depend significantly on the nature of EU withdrawal, and noted that downside risks have increased.
- ISM Manufacturing PMI (USD, GMT 14:00) – The ISM index is expected to rise to 52.7 in July from 51.7 in June, compared to a 14-year high of 61.4 in August. The ISM-NMI index is expected to rise to 55.5 in July from 55.1 in June and a 19-month low of 56.1 in March, versus a 13-year high of 60.8 in September. In the first half of the year we’d seen a stabilization in sentiment since the late-2018 pull-back.
Friday – 02 August 2019
- NFP and Labour Market Data (USD, GMT 12:30) – A 160k July nonfarm payroll rise is anticipated, following a 224k increase in June. The unemployment rate should tick down to 3.6% after an uptick to 3.7% in June, and hours-worked are estimated to rise 0.1%. Average hourly earnings should rise 0.3% m/m, for a y/y gain of 3.2%, above the 3.1% pace of June but below the 3.4% cycle-high pace of February.
- Trade Balance (CAD, GMT 12:30) – Canada could ran to a C$1.5 bln trade deficit in June, from the C$0.8 bln surplus in May.
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Andria Pichidi
Market Analyst
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