Week Ahead – US jobs report up next



The upcoming jobs report will be pivotal for the Fed in deciding whether the economy is headed toward hitting their substantial progress goal.  Now that the Fed has finally had their first deep dive into discussing tapering asset purchases, Wall Street will closely focus on labor market progress in the coming meetings.  The July jobs report is expected to show 925,000 jobs were created, an improvement from the prior month gain of 850,000. 

Tapering at earliest seems like it could be in September, but that still means interest rate hikes are a long way off.  Unless risk aversion becomes the dominant theme, the dollar could remain vulnerable in the short-term. 

Financial markets will also pay close attention to debt ceiling drama.  The Treasury still has around $450 billion in cash, so Congress can afford to delay tackling this issue until October.  While the Treasury will use extraordinary measures to prevent the US from defaulting, Republicans will start to posture for spending reforms in order for President Biden to move forward with his next round of stimulus.  


The data this week is unlikely to have done much to change the ECBs view on what is needed to achieve its new, more aggressive, inflation target. Hawks at the central bank may make a little more noise going forward, with German inflation now running above 3%. But I don’t expect this will change much at this stage. 

The key releases next week will be PMIs on Monday and Wednesday, with German factory orders on Thursday also noteworthy.


The Bank of England meeting next week is the standout event, although the meeting almost certainly comes to early to make any significant judgement on paring back monetary support. While the recent surge in the delta variant has eased, the risk of cases rising again is still significant. What’s more, the MPC will want more evidence on how the economy is responding to restrictions being lifted fully, not to mention the impact that the furlough scheme ending in September will have. 

Of course, the growth and inflation data may make some members of the MPC a little nervous and stimulate debate on the risks of it, but with the widespread view being that both are temporary, it’s unlikely that the majority policy makers will consider removing support any time soon. 

Emerging Markets


Unemployment fell to 4.8% this week, slightly behind expectations, while retail sales rose 10.9% on an annual basis, ahead of forecasts.

Next week we get the quarterly monetary policy report on Monday. This comes a couple of weeks after the central bank raised interest rates to 6.5%. They did warn of more to come after the meeting and the report may hold clues as to what we can expect going forward.

South Africa

PMI the most notable economic release next week. The central bank previously left interest rates unchanged and signaled a hike may be considered later in the year. 

Asia Pacific


Market sentiment has been dominated by the China government’s crackdown on the tech sector and now the  education sector with Mainland and Hong Kong exchanges, as well as US-listed China companies taking a bath this week. Concerns are also rising in the corporate credit sector with Chinese corporate dollar-denominated debt falling heavily this week.

Despite assurances from China that its moves were “targeted” and not part of a broader agenda, financial markets are taking this with a grain of salt and sentiment will start next week walking a tightrope. China equities will continue to underperform until the regulatory discount reaches equilibrium with lower prices.

China releases official Manufacturing and Non-Manufacturing PMIs over the weekend, along with Caixin Manufacturing PMI on Monday morning. A set of poor data could spark fireworks in the early part of the week and send Mainland and Hong Kong equities sharply lower once again in an already nervous environment.

Pan-Asia PMIs are also released Monday. Weak readings will increase nervousness already complicated by Asia’s delta-variant situation, and could be another headwind for both China and regional stocks, as well as ASEAN currencies which have not benefited from US Dollar weakness this past week.


The Indian Rupee has recovered over the past week due to lower oil importer buying, with Covid-indced demand still weak. Additionally INR has seen inflows from international investors who have been fleeing China markets and rotating into India and ASEAN markets. With its large universe of IPO’d tech unicorns, India is well positioned to benefit from a China rotation. Both the Sensex and the INR should outperform ASEAN markets on that basis in the coming week.

The back end of the week will be dominated by the latest Reserve Bank of India rate decision. Inflation remains above the RBI’s upper 6.0% limit, but the ongoing Covid-19 situation, although improving, should stay the central bank’s hand. It would be a huge surprise if the RBI hiked on Friday and if they did, India equities would fall sharply and the INR would rally sharply.

Australia & New Zealand

Australian stock markets are trading sideways over the past week with delta-variant cases increasing in Sydney resulting in a harsher lockdown and a 4-week extension. The week is dominated by the RBA rate decision on Tuesday, with no change expected. The threat to growth and employment from the NSW Covid situation will ensure the RBA remains very dovish. Other data incluses PMIs, Home Loans, Retail Sales and the Trade Balance, but global risk sentiment and the RBA will dominate.

Both the AUD and NZD continue to bounce around on swings in global risk sentiment. Both have traced out technical recovery formations this week, but have yet to break convincingly higher. That will very much depend on the Sydney Covid-19 situation stabilising, and China stock markets finding a floor next week. 

New Zealand’s Employment Change and Labour Costs data on Wednesday could send NZD/USD sharply higher if it comes in above expectations. The RBNZ has an itchy trigger finger and has said as much. Higher prints will make an RBNZ hike almost certain at its next meeting and be very supportive of the currency.


Japanese stocks continued gyrating on swings in risk sentiment internationally, reflecting the heavy presence of retail fast money inthe Japan market. We expect this volatility to continue as the only major data releases are Tokyo CPI and Household Spending. 

Japan expanded its Covid-19 states of emergencies to more prefectures on Friday, and that appears to be weighing on the Nikkei. An escalation of the Covid situation, especially if it threatens the Olympics, could be a strong headwind for Japan stocks next week.

USD/JPY has dissolved into a purely US/Japan interest rate differential play. The flattening US yield curve has seen USD/JPY fall to 109.50 and if yields in the US track lower next week, Friday’s US Non-Farm Payroll will ironically, be the biggest market-moving event risk for USD/JPY next week. 

Key Economic Events

Saturday, July 31

– US debt limit returns on August 1st as lawmakers debate over increasing or suspending the ceiling in the months ahead. 

Economic Data/Events

China July Manufacturing PMI: 50.8e v 50.9 prior; non-Manufacturing PMI: 53.3e 53.5 prior

Hong Kong budget balance

Sunday, Aug. 1

– UK Government lowers its contribution for furloughed workers to 60%, with the employer burden increased to 20% of pre-pandemic pay.

Monday, Aug. 2

– US ban begins over investing in 59 Chinese firms with ties to China’s military or surveillance industries.

– Director of NIAID Fauci speaks at the Center for Strategic and International Studies (CSIS) 

– The Toronto Stock Exchange will be closed.

Economic Data/Events

US July ISM Manufacturing PMI: 60.7e v 60.6 prior; July Final Markit Manufacturing PMI: 63.1e v 63.1 prelim; construction spending

Australia CoreLogic house prices, Melbourne Institute inflation, ANZ job advertisements

Eurozone Manufacturing PMI

Germany Manufacturing PMI, retail sales

India Manufacturing PMI

UK Manufacturing PMI

Australia Manufacturing PMI

Thailand Manufacturing PMI, business sentiment index

Russia Manufacturing PMI

South Africa Manufacturing PMI

Hungary Manufacturing PMI

Poland Manufacturing PMI

Turkey Manufacturing PMI

Czech Republic Manufacturing PMI

Sweden Manufacturing PMI

Switzerland Manufacturing PMI

China Caixin manufacturing PMI

Singapore PMI, electronics sector index

Japan vehicle sales, consumer confidence index, manufacturing PMI

Switzerland CPI

Bank of Russia quarterly monetary report

Tuesday, Aug. 3

– Eurogroup President Donohoe, Scotland PM Sturgeon, Singapore PM Lee Hsien Loong, and SEC Chairman Gensler to speak at 3-day annual Aspen Security Forum

Economic Data/Events

Australia rate decision: No changes expected to Cash Rate Target, likely to defer bond taper

Australia building approvals

US factory orders, durable goods

New Zealand CoreLogic house prices

Japan Tokyo CPI, monetary base

Turkey CPI, PPI 

Mexico international reserves

New Zealand Unemployment

Eurozone PPI

Denmark currency reserves

Wednesday, Aug. 4

Economic Data/Events

US ADP employment change

Thailand (BOT) rate decision: Expected to keep Benchmark Interest Rate unchanged at 0.50%

Eurozone PMIs, Retail sales

Hungary Retail sales

Australia Retail sales

Singapore PMIs

India PMIs

China Services PMIs

Japan PMIs

South Africa PMIs

Russia PMIs

Sweden PMIs

Germany PMIs


Thailand consumer confidence

France budget balance

EIA crude oil inventory report

Thursday, Aug. 5

– The Group of 20 digital economy ministers meet in Trieste, Italy.

– Inauguration day for Iran’s Ebrahim Raisi

Economic Data/Events

BOE Rate decision: to keep its benchmark interest rate and its bond-buying target unchanged

Czech Republic rate decision: To raise interest rates 25 basis points to 0.75%

US initial jobless claims, trade balance

France industrial production

Germany factory orders

Indonesia GDP

Australia Trade

Russia CPI

Thailand CPI

Eurozone ECB publishes Economic Bulletin

Russia gold and forex reserves

UK new car registrations

Ireland unemployment

Friday, Aug. 6

– RBA Governor Lowe gives testimony to a Parliament committee.

Economic Data/Events

US July Change in nonfarm payrolls: 925Ke v 850K prior; unemployment rate:5.6%e v 5.9% prior, wholesale inventories

Germany Industrial production

Italy Industrial production

Spain Industrial production

Hungary Industrial production

India Rate decision: Expected to keep Repurchase Rate unchanged at 4.00%

Canada unemployment

Australia Reserve Bank of Australia statement on monetary policy

Japan household spending, leading index

Switzerland Foreign reserves

China BoP current account balance

France Trade

Hungary Trade

South Africa gross and net reserves

Sovereign Rating Updates

– Norway (Fitch)

– ESM (S&P), 

– Czech Republic (Moody’s)

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Craig Erlam

Craig Erlam

Former 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.