Week Ahead - July 29th

In the US, it is expected that the Fed will leave the federal funds interest rate unchanged at 5.25% to 5.50% for 8 consecutive times, but interest rate cuts have been completely factored in, and attention will be drawn to signs relating to the central bank's plan in September.

Also, the US economy is expected to create 185,000 jobs this month, which is lower than the 206,000 in June, and the unemployment rate is expected to remain at 4.1%, the highest in 2021, and the wage increase rate is expected to remain at 0.3%.

Furthermore, the ISM PMI is expected to indicate that the manufacturing industry has been shrinking for 3 consecutive months.

Other key metrics to look out for include the JOLTS report, ADP employment statistics, Challenger employment cuts, final S&P global manufacturing PMI, S&P/Case Shiller home price index, FHFA home prices, CB consumer confidence, Dallas Fed manufacturing index, Dallas Fed services index, home sales hold, non-farm sector productivity, unit labor costs, and factory orders.

Additionally, traders will keep an eye on quarterly refinancing announcements and evaluate the federal government's borrowing requirements and future bond sales strategies.

Finally, the earnings season continues with reports from McDonald's, P&G, Merck, Toyota, AMD, Caterpillar, Pfizer, S&P Global, Striker, Airbus, Mastercard, T Mobile, Qualcomm, HSBC, Boeing, Intel, ExxonMobil, Chevron, and Linde, along with reports from the megacaps Microsoft, Apple, Amazon, and Meta.

Within the US, Canada's monthly GDP growth rate, Mexico's provisional GDP growth rate, Brazil's unemployment rate, and Brazil's and Canada's S&P global manufacturing PMI are also attracting attention.

Also, the central banks of Brazil and Chile are expected to leave interest rates unchanged.

In Europe, major reports on GDP and inflation in major economies such as the Eurozone, Germany, France, Italy, and Spain will be announced.

Eurozone GDP is expected to grow 0.3% in the second quarter, the same as in the first quarter.

Germany's growth rate is forecast to slow from 0.2% to 0.1%.

The annual inflation rate in the Eurozone is expected to fall to 2.3%, which is a three-year low, but inflation in Germany is expected to stabilize at 2.2%.

In the UK, inflation has returned to the Bank of England's target of 2%, so the market has factored in the possibility that the Bank of England will cut interest rates for the first time in 4 years or more as 45%.

Other notable important data include Eurozone business surveys and unemployment rates, German unemployment data, UK Bank of England financial indicators, CBI distribution, national housing prices, Italian industrial production and retail sales, Swiss KOF leading indicators, inflation, retail sales, etc.

In China, attention will be drawn to official and Caixin's July PMI figures as the first batch of economic signals for the third quarter.

The data continues to show sluggish domestic demand, and it is expected to provide the latest information on whether factories have succeeded in relying on overseas demand for sales after the People's Bank of China implemented emergency interest rate cuts due to pessimistic reactions to the 3rd Central Committee Plenary Session.

In Japan, financial markets still support keeping interest rates unchanged at 0.1% by the Bank of Japan, but in addition to the possibility that the pace of government bond purchases will be halved, interest rate hike observations have gained significant momentum last week.

Other major data releases in Japan include consumer confidence in July, unemployment rate in June, retail sales, industrial production, and number of housing starts.

In Asia, inflation indicators for July are scheduled to be announced from South Korea and Indonesia, and GDP statistics for the second quarter will be announced in Hong Kong and Taiwan.

In Australia, inflation indicators for June and the second quarter are the focus of economic data, and monthly indicators are expected to show deceleration on an annual basis.

Other Australian announcements include June's trade balance, total housing credit, retail sales, number of building permits, etc.