Will U.S Jobs and China PMI challenge to market this week?

Will U.S Jobs and China PMI challenge to market this week?

Following Fed Chair Powell’s speech in the Jeckson hall meeting that the central bank may need to raise interest rates further to ensure inflation is contained, but promised to move “carefully” at upcoming meetings, the focus for the next week shifts to economic data again. The U.S. NFP and Core PCE Price numbers will be important triggers before the Fed this month’s meeting. Additionally, China and the Eurozone will release their important economic numbers. Chinese PMI and Eurozone Inflation numbers will have to be watched.

Important data and events scheduled during the week

Tuesday – U.S. Consumer confidence and JOLTS Job Openings

Major economic calendar will start with Michele Bullock, the deputy governor of the Reserve Bank of Australia (RBA), giving a speech. It’s worth noting that she will become the RBA governor on September 18

Further, U.S. Conference Board’s consumer confidence index and JOLTS job openings for July are set to release.

Wednesday – U.S GDP, German CPI

The U.S. will release the second estimate for Q2 GDP growth and ADP employment report. ADP numbers expected to stay at 201k compared to previous 324k, while GDP growth expected to remain unchanged at 2.4%.

From the Eurozone, German and Spanish CPI numbers are lineup. Where Spanish Inflation remains in concern as it is expected to increase by 2.5% from 2.3%. German numbers expect to remain unchanged at 0.3%.

 Thursday–Important day ahead of bunch of data

Market will react to the China PMI number in the morning. Manufacturing and non-manufacturing PMIs for August are set to release. Forecast to stay lower from the previous at 49.1,51.1 from previous 49.3 and 51.5 respectively.

A slew of sluggish economic numbers will create a probability for stimulus, announcements on new support measures from the China Govt.

On the same day, Eurozone preliminary August Consumer Price Index numbers due to release.  Additionally, the European Central Bank (ECB) will release its meeting minutes.

 CPI is expected to reduce from 5.3% to 5.1% y/y, while core CPI that strips out food, energy, alcohol and tobacco prices is forecast to cool down from 5.5% to 5.3% y/y.

The European Central Bank has continually stressed that getting core CPI down to 2% is its main priority and it will be the main jitters in minutes of the July meeting that will be published on the same day. However, a less hawkish-than-anticipated tone is possible as the recent deceleration in growth is raising doubts about the need for further rate increases.

In Japan, there’s a slew of releases, including preliminary industrial output for July. Both numbers are expected to be lower from previous. Prelim Industrial Production m/m, expect to have a contraction by 1.2% from 2.4% while Retail sales at 5.5% from 5.6%.

U.S will release Core PCE Price Index m/m and Unemployment Claims numbers.  These reports have the potential to generate volatility in the markets as they provide insights into the health of the labor market and overall economic conditions.

Core PCE expected to come at 2% unchanged from previous while weekly jobless claims will expect to stay sideline 236k from 230K.

Friday- US Nonfarm Payroll Day

Market will react strongly on U.S. Nonfarm payrolls numbers. Which are forecasted to have increased by 169k in August, moderating from the 187k jobs added in July.

The unemployment rate is expected to hold steady at 3.5%, while average hourly earnings growth is also forecast to remain unchanged at 4.4% y/y in August.

Further, ISM manufacturing PMI, which will get to have the final say on how markets close for the week. It’s expected to come in at 46.6 for August, a very modest improvement over the prior month.

In other data, second quarter GDP growth data is set to be released by Canada. Number expected to have a contraction by 0.2% against expansion of 0.3%.

Japan will have a slew of releases, according to the Ministry of Finance’s estimate of Q2 capital expenditure. Number expects to come at 7.9% from 11.0%.

While Crucial one China Caixin Manufacturing PMI data will take attention for market players, although data expect to come unchanged at 49.2%.

India GDP Quarterly (Q1) is due to release, market forecast is to increase by 7.7% from the previous quarter of 6.1%.