A busy week ahead includes key data releases that could steer monetary policy around the globe, dominated by the release Friday night, our time, by the US jobs and unemployment data for June.
Before then there’s the release of manufacturing activity surveys (today and tonight) and then the same type of survey for the services sector midweek.
In Australia, the Reserve Bank is seen as certain to cut the cash rate for the second time in as many months at its July meeting tomorrow.
The US jobless rate is currently running near a 50-year low of 3.6%, but annual wage growth has disappointed despite the historically tight labour market. The annual growth in US wages is down to 3.1%from 3.4% earlier in the year.
US inflation has also retreated from around 2% to 1.5% on a core basis (the one preferred by the Fed). That and the global trade wars of Donald Trump have forced the Fed to move to a wait and watch stance – not the wait and cut bias many in the markets are demanding.
Market forecasts are for around 160,000 new jobs last month for the US, unemployment remaining low at 3.6% and wages growth remaining subdued, according to the AMP’s Chief economist, Dr. Shane Oliver.
The market was horribly wrong in missing the slump in May’s jobs report which came in well under forecast at 75,000, with another 75,000 cut from March and April.
Economists wouldn’t be surprised to some more revisions, especially for May with perhaps an increase because the figure was so low. But if the reported figure for June is less than 100,000 again, watch the bets rise that the Fed will move to a rate cut stance very quickly.
US manufacturing activity is slowing, as weakening durable goods orders and production data suggest. The June US manufacturing activity survey tonight, our time, is expected to show a further dip towards the 50 reading which divides expansion from expansion.
But the services sector survey mid-week is not expected to be so weak with a hold up in activity levels expected.
US car sales data for June and the first half of 2019 will be issued tonight and the outcome is expected to show a slow easing in demand and sales.
Elsewhere there’s the Eurozone unemployment for May tonight which is expected to remain unchanged at around 7.6%.
The surveys of eurozone manufacturing tonight are forecast to show signs of stabilising, while the services survey midweek will show continued modest levels of activity.
The Japanese June quarter Tankan business survey (today) is expected to show some softening.
And the second of two monthly Chinese business conditions surveys for June will be released today and are expected to remain softish but relatively stable.
