Week Ahead – Next up, jobs

How strong is the labour market?

Last week was action-packed and it’s not likely to ease up with attention now shifting from the Fed and the “technical recession” in the US to the labour market. Various officials have highlighted the strength of the labour market when explaining why the US isn’t in a real recession which will draw increased scrutiny on Friday’s jobs report.

Earnings have been a mixed bag so far, with big tech this past week being given a free pass when missing on revenue and earnings as long as the outlook was solid. Some benefited greatly from that while others didn’t fare so well. Investors are seemingly in a buoyant mood after the Fed meeting which may help over the remainder of the season.

We can’t put together a week ahead without discussing central banks and many more are due to meet next week. The Bank of England could be the latest to hike by 50 basis points, while the RBA is expected to do so again. There’s never a dull week in the markets at the moment.

Jobs growth expected to slow

Is the BoE ready to accelerate tightening?

RBA expected to continue aggressive tightening


The US economy is clearly in slowdown mode and now Wall Street will want to know how tight the labour market remains.  The July nonfarm payroll report is expected to show hiring is cooling but that unemployment is still expected to hold steady at 3.6%.  A gain of 250,000 jobs in July would be down from the pace of 372,000 seen in the prior month, while still showing signs that the economy is not in terrible shape. 

Traders will also pay close attention to a few Fed appearances during the week from Evans, Bullard, and Mester. Leading up to the September policy decision, traders will want to know how many Fed members are positioning themselves for a slower pace of tightening policy.    

The focus will go to NFP Friday, but it is a busy week filled with several key economic reports.  Monday is massive as the ISM manufacturing report will be closely watched as it is expected to show another decline but still remain in expansion territory.  Wednesday contains the release of both June factory orders and the July ISM services report.  Thursday has the June trade data and initial jobless claims, which have been steadily rising since the end of March. 

Election season heats up as the US primary elections are held in Arizona, Kansas, Michigan, Missouri, and Washington.  The Republican National Committee Summer Meeting takes place. 

Secretary of State Blinken is expected to attend the ASEAN foreign ministers’ meeting, where Russia’s Lavrov might attend.  


A relatively quiet week for Europe, with final PMIs and unemployment the only notable highlights. Even the surveys are unlikely to be subject to much of a revision. Inflation in July hit another record high which will keep the pressure up on the ECB to hike by 50 basis points in September.

The focus next week will be on the evolving situation around Nord Stream 1 and the inability of Europe to fill stores ahead of the winter. Now running at 20%, what are the chances of the final turbine running into issues and going offline? 


A 50 basis point rate hike is quite heavily priced in for next Thursday but it’s far from a certainty. The MPC has been very reluctant to hike too aggressively, preferring 25 at each meeting so far this year. A recession is coming to the UK later this year and policymakers may be mindful of the fact that too many hikes will just deepen the slump. 

Considering the size of the energy price cap increase facing households in October, policymakers may be right to be cautious despite inflation peaking above 11% as households will have no choice but to rein in spending as the cost of living crisis hits budgets. Final PMIs also in focus as the economy slows.


Services and manufacturing PMIs are the only notable releases next week. The rouble has seen some relief over the last couple of weeks but remains more than 15% above its pre-invasion level against the dollar meaning further rate cuts are likely in the pipeline. This could come in between meetings if the CBR determines it necessary.

South Africa

Only tier three data releases next week.


Monitoring Turkish inflation data is purely an academic exercise at this point as it has no impact whatsoever on the policy decisions of the CBRT. Still, it’s expected to surpass 80% next week when the July data is released. If nothing else, it certainly puts everyone else’s inflation problems into perspective. 


Inflation data next week is expected to accelerate to 3.6% for July, raising the odds of a rate hike from the SNB in September if it waits that long. A 50 basis point increase is largely priced in but it may move further. Either way, it will soon become the latest central bank to end years of negative interest rates.


China releases manufacturing and non-manufacturing PMIs on Sunday, and the Caixin manufacturing PMI on Monday. Weak numbers could see local equities drop at the open on Monday after negative comments around the economy this past Friday. 

Evergrande faces a deadline of this Sunday to agree on a debt restructuring with offshore bondholders. Failure could weigh on Hong Kong markets in particular.

Caixin services PMI could generate short-term volatility on Thursday.


India’s trade balance on Tuesday is likely to remain deeply negative at $26.0 billion, keeping the pressure up on the INR as soaring inflation globally blows out its import bills. It is continuing to suffer stock outflows from international investors, which is also INR negative. 

The RBI releases its latest interest rate decision on Friday. Markets are looking for a 50 basis point increase to 5.40%. The RBI has been hawkish in tone of late, but if they blink and hold or only move 0.25%, we may see some very heavy pressure on the INR once again, although that could be a short-term positive for local equities. That situation could be exacerbated if the US payrolls are strong, and the “softer Fed” trade sees some unwinding.


The Australian dollar remains at the mercy of international investor sentiment flows which have been positive for the past week. It could drop suddenly if investor sentiment swings south. Having said that, it has staged a major bullish technical breakout. For now, gains are being limited by AUD/JPY selling as USD/JPY collapses.

Australia has a big data week with ANZ job ads, retail sales, and the balance of trade which could bring some intraday volatility. The week’s highlight is the RBA rate decision on Tuesday with markets expecting another 50 basis point hike. Less could be positive for local equities. A 50 basis point hike could boost AUD/USD short-term, although it remains at the mercy of global investor sentiment swings.

New Zealand

New Zealand releases employment and labour cost data on Wednesday which has upside risk. Firm data will raise RBNZ hiking expectations, a potential headwind for local equities and short-term boost for the NZD.

The New Zealand dollar remains at the mercy of international investor sentiment flows but has made a substantial topside technical breakout. The rally is being tempered by NZD/JPY selling due to the USD/JPY collapse. If that slows, the NZD/USD rally could resume.


Japan releases Jibun Bank manufacturing and services PMIs this week, and household spending. It should generate only short-term volatility as markets focus on the US non-farms, and also the US/Japan rate differential following the USD/JPY collapse.

USD/JPY has collapsed in the past week as a less hawkish FOMC and soft US data saw US yields tumble. That has seen USD/JPY fall 500 points over two sessions as the very crowded long USD/JPY trade capitulated.


Another set of firm data from Singapore the past week has eyes firmly on retail sales on Thursday. Firmer numbers again will likely cement another tightening of monetary policy by the MAS in October, following its recent unscheduled move. 

Economic Calendar

Saturday, July 30

Economic Data/Events

UK train drivers expected to strike against seven companies

EasyJet Plc’s cabin crew in Spain are on strike through Sunday

Sunday, July 31

Economic Data/Events

China July manufacturing PMI: 50.4e v 50.2 prior, non-manufacturing PMI: 54.0e v 54.7 prior

Monday, Aug. 1

Economic Data/Events

US construction spending, July ISM manufacturing: 52.1e v 53.0 prior, final manufacturing PMI

Australia manufacturing PMI, Melbourne Institute inflation

China Caixin manufacturing PMI

Eurozone manufacturing PMI, unemployment

France manufacturing PMI

Germany manufacturing PMI

India manufacturing PMI

Italy unemployment

Japan vehicle sales, manufacturing PMI

New Zealand building permits

Russia manufacturing PMI

UK manufacturing PMI

Tory members start voting on the next UK PM

Tuesday, Aug. 2

Economic Data/Events

US JOLTS job openings, light vehicle sales

US primary elections are held in Arizona, Kansas, Michigan, Missouri and Washington.

US Secretary of State Blinken to attend the ASEAN foreign ministers meeting in Phnom Penh, Cambodia, and visit the Philippines

Russian Foreign Minister Sergei Lavrov to attend the ASEAN talks

Chicago Fed President Evans hosts a media breakfast

St. Louis Fed President Bullard discusses the economy and monetary policy at an event hosted by the Money Marketeers of New York University

RBA Decision: Expected to raise rates by 50bps to 1.85%

Australia building approvals

Mexico leading indicators, international reserves

Spain unemployment

UK house prices

Wednesday, Aug. 3

Economic Data/Events

US factory orders, durable goods, ISM services, services PMI

OPEC+ meeting on output

Australia services PMI, retail sales

China Caixin services PMI

Brazil rate decision

Eurozone retail sales, services PMI, PPI

Germany trade, services PMI

India services PMI

Japan services PMI

New Zealand unemployment

Russia services PMI, weekly CPI

Switzerland CPI

Turkey CPI, PPI

UK services PMI

EIA crude oil inventory

Thursday, Aug. 4

Economic Data/Events

US initial jobless claims, trade

Australia trade balance

Eurozone ECB publishes the economic bulletin

Germany factory orders

Hungary one-week deposit rate

UK BOE rate decision: Expected to raise rates by 50bps to 1.75%

UK Tory leadership debate between Liz Truss and Rishi Sunak

NATO Secretary General Stoltenberg speaks at the Workers’ Youth League on the island of Utoya, Norway

Cleveland Fed President Mester discusses the outlook for the economy and monetary policy at an event hosted by the Economic Club of Pittsburgh

The National Oceanic and Atmospheric Administration updates its 2022 Atlantic hurricane forecast ahead of the historical peak of the season

Congressional primaries are held in Tennessee

Friday, Aug. 5

Economic Data/Events

US July Change in nonfarm payrolls: 250Ke v 372K prior, unemployment rate

Australia RBA quarterly update of economic forecasts and policy outlook

Canada employment change, unemployment rate

France trade, industrial production

Germany industrial production

India rate decision

Italy industrial production

Japan household spending, labour cash earnings

Singapore retail sales

Spain industrial production

Thailand CPI

BOE Chief Economist Pill speaks at the Monetary Policy Report national agency briefing

Russian President Putin is to meet with Turkish President Erdogan in Sochi, Russia

Sovereign Rating Updates

France (Fitch)



Czech Republic (Moody’s)

Sweden (DBRS)

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 SKY News. 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
Craig Erlam

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