FXStreet (Bali) – David Fritz, Global Markets Strategist at Nomura, breaks down the key events for the week ahead, with the unambiguously main focus on Greece and later on the week, the US Non-Farm Payrolls.
Key Quotes
Other than Greece, the main event will be non-farm payrolls (on Thursday this coming week as Friday is being observed for Independence Day). Markets have begun pushing back the likelihood of rate hikes, as has Nomura.. Wages and employment have been key indicators to the Fed as indications of when to begin hiking, and solid numbers could begin to shift the probabilities forward again. Currently our estimates are for a NFP of 235K compared with consensus of 230K, so only just slightly above.
Sweden’s Riksbank will be the only central bank in G10 making policy decisions. We expect it to remain on hold in terms of rates at -25bp, but to reiterate that further easing could come at any time. Overall, we expect the bank to remain dovish and see limited upside risk for SEK in the near future.
China releases further data on PMIs on Wednesday, while the preliminary HSBC manufacturing PMIs the past week came in at 49.6, in line with expectations. Chinese data in general has been improving, but for now our economists maintain their forecast for real GDP in Q2 to slow to 6.6% y-o-y from 7.0% in Q1 as well as their expectations for more policy easing.
There will be a significant amount of data on the PMIs in Europe as well. France, Germany, and the Eurozone already released preliminary numbers this past week, which were on the positive side in general. No surprises expected on the final estimates. Other European data points include Eurozone CPI and employment on Tuesday and retail sales on Friday, which could further confirm or refute any changing momentum.
In the UK, Q1 GDP is expected to be revised up on Tuesday, due in large part to upward revisions in construction output.
Japanese data next week include industrial production and retail sales on Monday, and the release of the BOJ Tankan on Wednesday. In general our outlook for data on industrial production for May is bleaker than that of the rest of the industry (data already out). As for the Tankan, we think the June edition could well show an impressive recovery in domestic demand, with a clear improvement in sentiment among nonmanufacturers and a sharp upward revision to capex forecasts. We also envision an improving outlook for sentiment among manufacturers, which looks to have been suppressed by one-time factor
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