BOE meeting, U.S Job or China PMI. What will be this week’s market altering data?

After last week’s U.S. Fed, European Central Bank and Bank of Japan policy, the focus will turn on the Bank of England’s latest rate decision this week.  Further, clusters of economic data out of the Eurozone and China will also have to closely watch.

This week important data and events

Monday – Eurozone CPI

The week will start with Eurozone economics numbers. On Monday, a preliminary estimate of second-quarter GDP and the rate of inflation for the month of July will be made public. The debate over whether the European Central Bank may raise interest rates again at its next meeting in September will depend on the above data. The CPI numbers are expected to moderate slightly by 5.4% from 5.5%, while the GDP economy returned to growth in the second quarter, numbers expected to come at 0.2% from 0.1%.

Inflation in the eurozone has halved since peaking last October but, at 5.5%, still remains well above the ECB’s 2% target.

The ECB increased its deposit rate to a record high last week, but it did so without including a glaring indication of future increases in its policy statement. As a result, it is not safe to assume that it will boost it again at its forthcoming September meeting.

Thursday– Bank of England Policy, China PMI

Thursday will be a meaningful day in the week. As BOE will hold its latest rate-setting meeting and markets jitters about whether policymakers will revert back to a 25-basis point rate hike after a 50-bps hike in June will have to closely watch.

Since February, inflation numbers have eased, and there are indications that general pricing pressures are beginning to ease.

But inflation, at 7.9% in June, stood at the highest among major economies and remains well above the BOE’s 2% target, so markets shouldn’t rule out the possibility of a 50-bps hike, particularly if policymakers think they may need to hike again in September.

Investors have criticised the BOE for being behind the times as a result of inflation continuing to rise faster than anticipated despite 13 consecutive rate hikes since December 2021, which raised the likelihood of a recession.

On the same day, China Service PMI numbers set to release data are expected to moderate by 52.5 from 53.90, which could have a negative impact on the market.

The second quarter of China’s economy had modest growth due to weaker domestic and international demand, but most analysts agree that policymakers are unlikely to implement any major stimulus measures due to growing concerns about debt problems.

Friday –  U.S. jobs report

On the weekend, the market will react strongly to U.S Non-Farm Employment numbers. It’s expected to show that the economy added 200k jobs in July compared to 209k in June.   While the unemployment rate is expected to remain unchanged at a historical low of 3.6%.

The flexibility of the labour market has been a key factor in shaping the view that the economy is heading towards a so-called soft landing of cooling inflation and strong growth.

When Fed Chair Jerome Powell stated last week that the central bank’s staff no longer predicts a U.S. recession and that inflation had a chance of returning to its 2% objective without significant job losses, the attitude received some support.

On the same day, Canada’s unemployment numbers will have to be watched. Employment Change expects to shrink by 15.5K from 59.9K, while the unemployment rate may jump by 5.5% from 5.4%.

All over sentiment will remain volatile as the BOE meeting, China numbers and U.S. job numbers will have a significant impact during the week