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The most important economic events expected this week 06 to 10 July 2020
Canada and the UK recorded negative growth, reflecting the harsh economic conditions sweeping the world's major economies. There was an improvement in the manufacturing and construction sectors, although most PMIs are still in a contraction zone.
In the second quarter, the British economy contracted 2.2 percent. This review was negative from the initial estimate of 2.0 percent. This was the worst quarterly decline since 1979, as the coronavirus had a major negative impact on economic activity. In the manufacturing sector, the final PMI came in at 50.1, just above the 50.0 line, which separates contraction from expansion. The PMI for final services came at 47.1, a figure that improved significantly from the previous reading at 29.0 points.
Canadian gross domestic product contracted by 11.6% in April, after a previous drop of 7.2%.
German inflation improved to 0.6%, after a 0.1% advance previously. In the euro zone, inflation rose to 0.3%, compared to 0.1% a month ago. The basic reading was significantly stronger, at 0.8%. Manufacturing PMIs in Germany and the euro zone rose slightly in June, but are still in their mid-1940s, indicating deflation. France was a bright spot, with a reading of 52.3, indicating expansion.
In the US, manufacturing improved sharply, as the Manufacturing PMI rose from 39.8 to 49.6 points. The estimate was at 50.0, which separates contraction and expansion. Durable Goods Orders shone in May. The main figure increased 4.0%, rebounded after a decline of 7.4 percent. The baseline reading increased by 15.8%, bouncing from a previously -17.2% reading. The Conference Board consumer confidence index jumped from 85.9 to 98.1 and easily beat estimates of 91.6 points. Non-farm payrolls increased in June, with gains of 4.80 million. This comes after the May release of 2.50 million.
US ISM Non-Manufacturing PMI: Monday, 15:30. The PMI hit two consecutive issues below the 50 level, indicating deflation. The index improved to 45.4, up from 41.8 previously. The rally is expected to continue, with an estimate of 50.0 points.
American Unemployment Claims: Thursday, 15:30. Unemployment claims continue to decline as the US labor market slowly shows signs of recovery. The index fell to 1.42 million last week, down from 1.48 million previously. This was above the 1.35 million estimate. Will the rally continue in the next release?
American Producer Price Index: Friday, 15:30. The main reading rebounded in May with gains of 0.4%, after a prior sharp loss of 1.3%. The core reading fell 0.1% in May, its third decline in four months. Expectations for headline reading stand at 0.4% and the base version is expected at 0.1%.
Canadian Employment Report: Friday, 16:30. The Canadian economy recovered from the loss of more than 1.99 million jobs in April, with an increase of 289.6 thousand jobs in May. Analysts expect better numbers in June, with expectations at 550.0K. The unemployment rate increased from 13.0% to 13.7% in May, but this exceeded expectations of 15.0%. The estimate for June is 12.5 percent.
Reserve Bank of Australia Rate Decision: Tuesday, 7:30. The Reserve Bank of Australia is expected to keep the interest rate at 0.25%, since it has been linked since March. Investors will carefully comb the price statement, looking for clues about future cash movements. With the AUD / USD surging 12% in the second quarter, policymakers will have to consider raising interest rates to maintain coverage of the Australian dollar's value.
British Construction PMI: Monday, 11:30. Building activity was close to bottom in April, with a very weak 8.2 point reading. The PMI improved to 28.9 in May, and is expected to rise to 46.0 in the upcoming release. Level 50 separates contraction from expansion.
