Central banks and data will be in focus this week.
On the central bank front, the FOMC minutes for the June meeting will be released this week. The US Fed is also expected (tentative) to submit the biannual monetary policy report.
The RBA will meet on rates this week and Governor Lowe will hold a press conference after the Board meeting. The RBA board is expected to decide on the 0.1% 3yr yield target and whether to extend purchases to the next Government bond maturing in Nov 2024. The Board is also expected to decide on the future value and timing of QE purchases.
ECB President Lagarde is expected to give several speeches this week.
Last week, US non-farm payroll data increased more than expected by +850k jobs (expecting 675k). The May result was revised higher by +24k jobs and Apr was revised lower by 9k jobs. The payrolls growth in Jun was made up of +662k private-sector jobs (goods payroll jobs +20k, services payroll jobs +642k) and +188k public-sector payroll jobs. In the private sector, leisure and hospitality payrolls increased by +343k in Jun. In the public sector, local government education accounted for the largest share of the increase in public sector jobs with +155k jobs. Overall, payrolls are still 6.7m below pre-pandemic levels.
Despite the strong payrolls number, the Household survey recorded low growth in employment for June. The unemployment rate increased to 5.9% as the participation rate remained unchanged for the 16yrs+ age group at 61.6%.
The key data releases this week will be:
US ISM services PMI for Jun, JOLTS for May, and Consumer Credit for May.
Aus retail sales for May have been released and growth came in stronger than expected at +0.4% for the month.
The final services PMI’s for Jun will be released for the US and the Eurozone.
This week, the US Treasury will settle $266bn in ST Bills, with a paydown of approx. $22bn.
Approx. $20bn in ST Bills will mature on the Fed balance sheet and will be rolled over.
Fed purchases of US Treasuries (QE) will resume on Tuesday. Purchases of US Treasuries are expected to be $24.3bn, up from $7.9bn last week. MBS purchases are expected to total $18.7bn (down from $21.6bn last week).
More detail (including a calendar of key data releases) is provided in the briefing document – download the file here;
Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net
