Financial Market Preview for July 6-10

The recent NFP report wasn’t far off the market estimates as 223K jobs were added back in June, albeit the overall it wasn’t too impressive with lower participation rate and no gain in wages. But for this week the main event will continue to revolve around Greece and the latest developments there: Whether Greece votes yes on the bailout plan. A “no” vote could bring the Greeks one step closer towards leaving the EU. Besides this news item that will start off the week, other reports and events to consider including: Minutes of FOMC meeting, Japan’s current account, U.S. JOLTS, Great Britain manufacturing production, China’s CPI,  U.S. non-manufacturing PMI, RBA’s rate decision, China’s new loans, and German factory orders production. So let’s breakdown the economic calendar for the week of July 6th to 10th.  

(All times GMT):

Sunday, July 5th

Greek Bailout Vote: This is the highly anticipated referendum on the bailout plan; a “No” vote on the bailout could bring Greece much closer towards leaving the EU. But a “Yes” vote could also, in sense, mean the beginning of the end for Syriza and Alexis Tsipras – it could lead to new elections. For now, the polls are close, albeit after the banks closed perhaps this moved the Greeks a bit closer towards voting “Yes. Also, the Greeks, in previous polls, were much more in favor of having a strong currency. Once we get the votes, in either way, the markets are likely to stir up on Monday;

Monday, July 6th

08:00 – German Factory Orders: In the recent report, factory orders bounced back by 1.4% during May; currently, the market expectations are for no change in June;

15:00 – U.S. ISM Non-Manufacturing PMI: This report will refer to June 2015. In the last update for May, this index declined to 55.7 — the non-manufacturing sector is expanding at a slower pace compared to the previous month; current estimates are for the PMI to rise to 56.5;

Tuesday, July 7th

05:30 – Reserve Bank of Australia – Cash Rate Statement: Last month, RBA left its cash rate unchanged at 2%. Current estimates are that the RBA will keep its rate flat. But there is still a small chance RBA will reduce the rate again considering the recent developments in Europe and the weakness in China;

09:30 – Great Britain Manufacturing Production: This report will show the annual rate of GB’s manufacturing production for May; in the last report regarding April 2015 the index changed direction and fell by 0.4%; this time, the estimates are for 0.2% gain;

13:30 – Canadian Trade Balance: In the recent report, the deficit in the trade balance remained unchanged at $3 billion;

13:30 –American Trade Balance: This monthly report for May will present the changes in imports and exports of goods and services to and from the U.S, such as commodities such as oil and gas; according to the last American trade balance update regarding April the goods and services deficit contracted to $40.9 billion; current projections are for the deficit to expand to $42.8 billion;

15:00 – U.S JOLTS Job Openings: The Bureau of Labor Statistics will publish its monthly report on the U.S number of job openings for May, excluding the farming industry; in the previous update regarding April, the number of jobs opening rose to 5.38 million; current market predictions are for the number to fall to 5.38 million;

Wednesday, July 8th

00:50 – Japan’s Current Account: This report will present the changes in the difference between imported and exported goods, services, and income flows. In the previous monthly report, the surplus in the current account fell to 1.27 trillion yen;

15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will release its weekly report on the U.S oil and petroleum stockpiles for the week ending on July 3rd;

19:00 – Minutes of FOMC Meeting: Besides the Greek bailout vote, this will be the main event of the week. Back in June, the FOMC left the door open for a rate hike this year, but the market doesn’t seem too in line with this assessment. The minutes could provide additional more insight about the discussions around the possibility of a rate hike and the monetary policy of the Fed in general. Although the Fed has usually kept a tight lip in the minutes so it’s unlikely to offer more guidance than the statement or Yellen’s press conference did back in June;

Thursday, July 9th

02:30 – Australia Employment Update: In the last update regarding May 2015 the rate of unemployment inched down to 6%; the number of employed (seasonally adjusted) grew by 42K people. This report may move the Australian dollar (see here the recent report);

02:30 – China’s CPI: According to the recent report, the CPI slipped to an annual rate of 1.2%; if the annual rate falls again, it could signal the Chinese economy isn’t progressing; the current expectations are for the CPI to inch up to 1.3%; in the meantime, the PPI is actually negative at 4.6% — another troublesome indicator;

12:00 – BOE Rate Decision & Asset Purchase Plan: This event isn’t likely to move the markets considering Bank of England isn’t likely to make any changes to its policy at this point in time;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly report will refer to the changes in the initial jobless claims for the week ending on July 2nd; in the previous report, jobless claims rose to 281K; the expectations are  for this number to remain virtually unchanged at 277K;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly report of the U.S. natural gas market will refer to the recent changes in natural gas production, storage, consumption and rates as of July 3rd;

Friday, July 10th

13:30 – Canada’s Employment Report: In the last employment update for May 2015, unemployment remained flat at 6.8%; the employment grew by 58.9K;

Tentative – China New Loans: According to the last report, the total loans rose to 901 billion Yuan; this report is another indicator for China’s economic progress;

17:30 –Fed Chair Yellen Speaks: Yellen is expected to speak about the economic outlook at the Cleveland’s Sally Gries Forum Honoring Women of Achievement;

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