Week Ahead – Jitters continue into busy week

Key Economic Releases and Events

Monday 29th June

UK Time Country Relevance Indicator Name Period
00:50 Japan Medium Retail Sales YY May
05:00 Thailand Medium Manufacturing Prod YY May
08:00 Hungary Low Unemployment Rate 3M May
10:00 Euro Zone Medium Business Climate Jun
10:00 Euro Zone Medium Economic Sentiment Jun
10:00 Euro Zone Medium Industrial Sentiment Jun
10:00 Euro Zone Medium Services Sentiment Jun
15:00 United States Medium Pending Sales Change MM May

 

Tuesday 30th June

00:00 South Korea Medium Industrial Output YY May
00:30 Japan High Jobs/Applicants Ratio May
00:30 Japan High Unemployment Rate May
00:50 Japan High Industrial O/P Prelim MM SA May
02:00 China (Mainland) Low NBS Non-Mfg PMI Jun
02:00 China (Mainland) High NBS Manufacturing PMI Jun
07:00 United Kingdom High GDP QQ Q1
07:00 United Kingdom High GDP YY Q1
07:00 Denmark High GDP QQ Revised Q1
07:00 Denmark High GDP YY Revised Q1
07:00 Denmark High Unemployment Rate May
07:30 Switzerland Medium Retail Sales YY May
08:00 Spain High GDP QQ Q1
08:00 Spain Medium GDP YY Q1
08:00 Czech Republic Low Revised GDP YY Q1
08:30 Thailand Medium Trade Account May
09:30 Hong Kong Low Retail Sales YY May
10:00 Euro Zone High HICP Flash YY Jun
10:00 Euro Zone High HICP-X F&E Flash YY Jun
10:30 South Africa High GDP QQ Annualised Q1
10:30 South Africa High GDP YY Q1
13:30 Canada High GDP MM Apr
21:30 United States Not Rated API weekly crude stocks 22 Jun, w/e

Wednesday 1st July

00:50 Japan High Tankan Big Mf Idx Q2
01:30 Japan High Jibun Bank Mfg PMI Jun
01:30 South Korea High IHS Markit Mfg PMI Jun
01:30 Indonesia High IHS Markit PMI Jun
01:30 Thailand Medium Manufacturing PMI SA Jun
02:45 China (Mainland) High Caixin Mfg PMI Final Jun
06:00 India High IHS Markit Mfg PMI Jun
07:00 Germany Medium Retail Sales YY Real May
07:00 Russia High Markit Mfg PMI Jun
07:30 Sweden Medium PMI Manufacturing Sect Jun
08:00 Turkey High Manufacturing PMI Jun
08:00 Hungary Low Manufacturing PMI SA Jun
08:15 Spain Medium Manufacturing PMI Jun
08:30 Switzerland Medium Manufacturing PMI Jun
08:30 Sweden High Riksbank Rate 1 Jul
08:30 Czech Republic Medium Markit PMI Jun
08:45 Italy High Markit/IHS Mfg PMI Jun
08:50 France High Markit Mfg PMI Jun
08:55 Germany High Markit/BME Mfg PMI Jun
08:55 Germany High Unemployment Rate SA Jun
09:00 Norway Medium Manufacturing DNB PMI SA Jun
09:00 Euro Zone High Markit Mfg Final PMI Jun
09:30 United Kingdom High Markit/CIPS Mfg PMI Final Jun
10:00 Denmark Medium PMI Manuf Jun
13:15 United States Medium ADP National Employment Jun
14:45 United States High Markit Mfg PMI Final Jun
15:00 United States High ISM Manufacturing PMI Jun
15:30 United States Not Rated EIA Weekly Crude Stocks 26 Jun, w/e
15:30 Mexico High Markit Mfg PMI Jun
Indonesia High Inflation YY Jun

 

Thursday 2nd June

00:00 South Korea Medium CPI Growth YY Jun
07:30 Switzerland Medium CPI YY Jun
08:00 Hungary Low Trade Balance Final Apr
09:00 Italy Medium Unemployment Rate May
10:00 Euro Zone High Unemployment Rate May
13:30 United States High Non-Farm Payrolls Jun
13:30 United States High Unemployment Rate Jun
13:30 United States Medium Average Earnings MM Jun
13:30 United States High Average Earnings YY Jun
13:30 United States Medium Average Workweek Hrs Jun
13:30 United States Low Labor Force Partic Jun
13:30 United States High Initial Jobless Claims 22 Jun, w/e
13:30 United States Medium Continued Jobless Claims 15 Jun, w/e
14:30 Canada High Markit Mfg PMI SA Jun
15:00 United States Low Durables Ex-Def, R MM May
15:00 United States Low Durable Goods, R MM May
15:00 United States High Factory Orders MM May
15:00 United States Low Factory Ex-Transp MM May

 

Friday 3rd June

00:01 United Kingdom Not Rated GfK Consumer Conf (Adhoc) Jun
01:30 Japan High Services PMI Jun
02:30 Australia High Retail Sales MM May
02:30 Australia High Trade Balance G&S (A$) May
02:45 China (Mainland) High Caixin Services PMI Jun
06:00 India High IHS Markit Svcs PMI Jun
06:00 Singapore Low Retail Sales YY May
07:00 Russia High Markit Services PMI Jun
07:30 Sweden Low PMI Services Jun
08:00 Turkey High CPI MM Jun
08:15 Spain Medium Services PMI Jun
08:15 South Africa High Std Bank Whole Econ PMI Jun
08:45 Italy Medium Markit/IHS Svcs PMI Jun
08:45 Italy Not Rated Composite PMI Jun
08:50 France High Markit Serv PMI Jun
08:50 France High Markit Comp PMI Jun
08:55 Germany High Markit Services PMI Jun
08:55 Germany High Markit Comp Final PMI Jun
09:00 Norway Medium Reg’d Unemployment SA Jun
09:00 Euro Zone High Markit Serv Final PMI Jun
09:00 Euro Zone High Markit Comp Final PMI Jun
09:30 United Kingdom Medium Markit/CIPS Serv PMI Final Jun
09:30 United Kingdom Not Rated Composite PMI Final Jun
14:00 Singapore Low Manufacturing PMI Jun
Thailand Medium CPI Headline Inflation Jun
Thailand Medium CPI Core Inflation YY Jun

Country

US

The Fed releases the Minutes to their last policy decision and may start to show some signs they are worried about inflation.  Policymakers will likely reiterate they are flying blind given the uncertainty about the course of COVID-19 and will likely keep all options on the table for further easing.  Negative rates are probably not on their radar unless we see the prospects of longer and deeper recession grow. 

A lot of attention will fall on Texas and the halting of their reopening of its economy.  Texas was one of their first states to reopen and if they end up having to return to stricter restrictions, Wall Street could anticipate a much deeper recession as the V-shaped recovery could become a W-shaped one.  Coronavirus cases are growing by at least 5% in 31 states and this could see lost reopening momentum mean many-out-of-work Americans will struggle to find employment. 

US Politics

With just over four months to go to the US Presidential election, everyone is focusing on former-VP Biden’s strong performance in recent battleground state polls.  President Trump is starting to see the deficit widen in Michigan, Wisconsin, Pennsylvania, Florida, Arizona, and North Carolina.  The coronavirus is surging again and many states may be forced to pause or reverse reopening, as new coronavirus and hospitalizations surge. 

Democrats are eagerly awaiting former-VP Biden’s decision on his running mate.  Prior to COVID-19, the Democratic National Convention was originally scheduled in July, meaning we should have found out his decision by June.  Since the convention was delayed till August 17th, he will have more time to evaluate his candidates.  Biden will turn 78 a few weeks after the election, so his VP selection will be critical for many voters.

Brexit

This week there has been some signs this week that compromise is possible on some of the more contentious areas of the trade deal but an agreement is still some way off. Thankfully an intense summer of negotiations are planned. Michel Barnier warned that “the real moment of truth” will come in October, which throws the summer deadline out of the window. But let’s face it, that was never going to happen.

Sweden

The Riksbank meets next week but no change is expected, with interest rates currently sitting at 0%. There may be some movement in the next quarter but a lot can change in that time, in the current environment. 

China

China is embroiled in multiple diplomatic conflicts at the moment, from US/China trade, Hong kong’s security law to the standoff with India in the Himalayas. Any of these could quickly escalate and have negative repercussions across markets around the world.

Sunday, China releases Industrial Profits YTD for May. Expected-22.0%, a slight improvement. Worse than expected could see Asia markets sharply lower on Monday morning. Official and unofficial Manufacturing and Non-Manf PMI’s released throughout the week. Potential for short-term volatility.

Hong Kong

Hong Kong security law outline poorly received. 28th June meeting in Beijing to decide exact wording. That has potential to cause market volatility next week when released. Increased protests and depending on wording, negative impact on stock market.

India

Economy continues reopening but Covid-19 cases continue spiking, markets negative. Standoff with China continues in the Himalayas, the situation is tense and could escalate rapidly. No significant data.

Australia

Australian Dollar remains under pressure as bull-market correction continues. High potential for more downside. Australia stocks and currency could have a significant vulnerability to sudden downside shifts in sentiment as a proxy for global risk as momentum in global recovery trade appears to be ebbing.

Community infections are increasing again in Victoria, Supermarkets limiting supplies. Markets negative.

Friday Australia Balance of Trade, short-term volatility only.

Japan

North korean tensions have faded, markets positive. Covid-19 risks in Tokyo and Osaka. Heavy data week ahead. Ind. Prod, Tanken, Ret.Sales. Expected to show Japan’s recovery is very slow. Local markets negative.

Market

Oil

The oil demand recovery story was dealt a blow this week after the US registered the biggest-ever jump in coronavirus cases, suggesting many states may have to visit regional lockdowns soon.  States will do their best to avoid a complete reversal with reopening phases, so the economic recovery should not complete stall out. 

WTI crude has not been able to do much after capturing the $40 level and seems destined to continue to consolidate between the $35 and $42 level over the next couple weeks.  The rapid demand rebound is not happening, but stimulus efforts, pauses in reopening of businesses, improved treatments for the virus are limiting the downward pressure on crude prices. 

Oil prices are slightly higher in early trade mirroring the broader fluctuations with US equities.

Gold

After nearly testing the $1800 an ounce level earlier in the week, gold prices are consolidating as the US dollar firms up.  Gold will continue to see strong support as the coronavirus situation deteriorates globally and as central banks and governments will continue to pump in more stimulus to avoid strains to the financial system and to salvage as many jobs as possible. 

Gold prices (in dollar-terms) seem destined for record high territory as the latest spike in COVID-19 cases will see a much slower economic recovery that will keep the stimulus trade going strong.  The global recession might be deeper than expected, but a scramble for cash (extreme risk aversion forces investors to sell their gold positions for cash) will not likely take place for gold given the optimism with eventual rebound and breakthroughs on the treatment and vaccine front.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst - UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a Market Analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam