The week ahead (31 July – 4 Aug.): Spot again on NFP, and will BOE surprise the markets?

30 Jul 2017 10:30 PM

As usual, markets are looking to the US non-farm employment data on the first Friday of each month to monitor labor market improvements and the impact on the Federal Reserve rate hike. The Bank of England and the Reserve Bank of Australia will also be in the spotlight. Below are the highlights of the week's important economic data.

Chinese manufacturing sector data
China's manufacturing sector's manufacturing data for big companies will be released on early Monday for July and the PMI indicator is expected to slow slightly to 51.6 from 51.7 in June. On Tuesday morning, the PMI manufacturing index for small and medium-sized firms is expected to grow slightly to 50.5 in July.

European inflation figures
With the start of the European session, the Euro zone CPI is expected to rise by 1.3% in July, unchanged from the June reading, to stay below the ECB target of 2%, and the core index, which excludes the most volatile Such as food, energy, alcohol and tobacco, is expected to rise 1.2% in July, unchanged from the previous month's reading.

Eurozone growth data for the second quarter of 2017 is also will be released, with GDP expected to grow 2.1% year-on-year and 0.6% quarterly. The improvement in economic data in the eurozone is increasing the pressure on the ECB to tighten its monetary policy and begin to reduce the monetary easing program.

Interest rate decision from the RBA
Early in the morning on Tuesday, the Reserve Bank of Australia announces its interest rate decision and is expected to remain unchanged at 1.50% for the eleventh consecutive meeting, so attention will be directed towards the interest rate statement and whether it will come as neutral as the previous meeting or possibly be more tightening.

British interest rate decision and inflation report
The Bank of England announces its interest rate decision on next Thursday and is expected to remain unchanged at 0.25% historic lows. The Bank will publish its Quarterly Inflation Report, followed by a press conference for Bank of England Governor Mark Carney. As the price continued to rise, some policy makers tended to consider the option to raise interest rates, but recent weak data, along with recent uncertainty, have prevented it.
The markets are also monitoring the manufacturing and service sector data in the UK.

US Jobs Report
The US nonfarm payrolls are due to be announced next Friday. It is expected that economy to add 187,000 jobs in July after adding 222,000 jobs in June and unemployment to fall to 4.3%. and the focus will headed to the hourly average earnings which is expected to rise by 0.3% in July.

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