Monday: China
Caixin/S&P Global Manufacturing PMI came in at 50.5 vs. 50.2 expected and
50.9 prior.

The Switzerland
CPI Y/Y came in at 1.7% vs. 1.8% expected and 2.2% prior while the Core CPI Y/Y
printed at 1.8% vs. 1.9% prior. The inflation rate is back within the SNB 0-2%
target band, so we should expect the SNB to remain on hold at the next meeting,
all else being equal.

Saudi Arabia
extended the voluntary output cuts for another month. Russia has also said that
it will reduce oil exports by 500K bpd in August.

ECB’s Nagel (hawk)
said that inflation is not retreating as they would like it to, but he is
confident that a hard landing can be avoided. He also said that they still have
way to go with policy tightening and that the euro systems balance sheet should
be significantly reduced in coming years.

The US ISM Manufacturing PMI came in at 46.0 vs. 47.0 expected and 46.9
prior. The other notable components were:

· Prices
paid at 41.8 vs 44.0 expected. The prior reading was 44.2.

· Employment at 48.1 vs. 50.5 expected. The
prior reading was 51.4.

· New
orders at 45.6 vs. 42.6 prior.

As Eric Basmajian
from EPB Research noted, it’s rare to see the 100% of the ISM Manufacturing PMI components being
in contraction.

Tuesday: The RBA has left the cash rate unchanged at 4.10% as
expected. The central bank said that higher rates are working to establish a
more sustainable balance between supply and demand in the economy and will
continue to do so. The RBA decided to hold interest rates steady to assess the
impact of rate hikes to date and the economic data. They stated that some
further tightening of monetary policy may be required, and that the RBA remains
resolute in its determination to return inflation to target and will do what is
necessary to achieve that.

The Canada S&P
Global Manufacturing PMI came in at 48.8 vs. 49.0 prior with output, new orders
and employment all declining.

Wednesday: The China Caixin/S&P Global Services PMI came in
at 53.9 vs. 57.1 prior.

According to
Japan’s largest trade union confederation Rengo, Japanese firms offered the
biggest wage hikes in 30 years hitting 3.58% for 2023. Wage growth is one of
the key trends the Bank of Japan (BOJ) is closely watching as it considers when
it should unwind its ultra-loose monetary policy.

ECB’s Nagel (hawk)
said that interest rates must rise further but it’s too early to say how far.

ECB’s Visco (dove)
said that more rate hikes are not the only way to curb inflation as they can
just maintain rates adequately high for a sufficient period of time. He added
that rate decision is taken on a meeting-by-meeting basis, depending on the
data. He concluded by saying that he doesn’t agree with the idea of tightening
too much over tightening too little.

The FOMC Minutes
showed that some participants favoured or could have favoured a 25 bps hike
noting the tight labour market, stronger economic momentum and little evidence
of inflation on path to 2%. The Fed staff saw a mild recession as likely later
this year. Almost all participants stated that upside risks to inflation might
become unanchored. Overall, there’s nothing really new that we haven’t known
already.

Fed’s Williams
(hawk) said that he’s not happy with where inflation is, and that fighting
inflation remains the Fed’s main job. He acknowledged progress on inflation but
added that price pressures are still too high. He also said that the economy has
strong demand for labour, and he’s surprised to see resilience of the housing
market. He concluded that inflation’s ultimate fate is up to the Fed and that
it makes sense to slow rate rises right now and being dependent on the data.

Thursday: BoJ’s Deputy Governor Uchida said that they will
maintain YCC to help continue easy monetary conditions as the risk of missing
the chance to hit 2% inflation with premature policy shift is bigger that being
late in tightening monetary policy.

SNB’s Maechler
said that further rate hikes cannot be ruled out.

BoE’s Bailey said
that there is evidence that some retailers are overcharging customers and that
the moves by regulators on retail prices will help to lower inflation. He added
that he cannot give a data on when interest rates will start to come down.

The US Challenger
layoffs fell to a seven-month low in June as employers cut 40.71K vs. 80.09K
prior.

The US June ADP
employment came in at 497K vs. 228K expected and 278K prior. This was the largest
increase since February 2022.

The US Initial
Claims showed a 248K increase vs. 245K expected and the downwardly revised 236K
prior. The Continuing Claims beat expectations again printing at 1720K vs.
1745K expected and 1733K prior. This is a sign that people are finding jobs
pretty quickly after being laid off.

Fed’s Logan (hawk)
said that she would have been ok with a June rate hike and that more rate hikes
are likely necessary. She expressed concern whether inflation will cool quickly
enough as the process of rebalancing the economy is slower than expected. She
acknowledged that the uncertain environment enabled the June pause but she’s
sceptical about lagged impact of past Fed rate hikes.

The US ISM
Services PMI beat expectations coming at 53.9 vs. 51.0 expected and 50.3 prior.
Almost all the sub-indexes beat expectations, with employment coming at 53.1
vs. 49.9 expected and prices paid at 54.1 vs. 53.3 expected. The services
sector remains pretty strong and it’s likely to make the Fed’s job of bringing
core inflation down to target harder.

US Job Openings in
May fell to 9.824M vs. 9.935M expected and the prior upwardly revised 10.320M
figure. Notably, the quits rate moved higher from 2.4% to 2.6%, which is indicative of a stronger
labour market as people generally quit when they are confident of finding a better job
pretty easily.

Friday: ECB’s Lagarde (hawk) said that they still have work
to do to bring inflation back down to their target and that the priority is to
maintain price stability. She acknowledged that inflation has started to
decline but it’s still higher than the 2% target.

The Switzerland
June seasonally adjusted unemployment rate remained unchanged at 2.0%.

ECB’s de Guindos
(dove) said that they will continue to follow a data dependent approach as they
are now beginning to see the impact of rate hikes on the economy. He
acknowledged that their job is not yet done, and that services inflation and
labour costs need to be closely monitored as the evolution of core inflation
will be key to future policy decisions. He concluded that what happens in
September remains an open question.

The US NFP has
finally broken the winning streak coming at 209K vs. 225K expected and 339K prior.
The unemployment rate printed at 3.6% vs. 3.6% expected and 3.7% prior with the
participation rate remaining unchanged at 62.6%. The more concerning stuff for
the Fed is Average Hourly Earnings that printed at 0.4% (0.358% unrounded) vs.
0.3% expected for the M/M reading and 4.4% vs. 4.2% expected for the Y/Y one. Average
Weekly Hours have also ticked up to 34.4 vs. 34.3 prior. Apart from the slight
miss on the headline number, there’s not much here that indicates a softening
in the labour market considering also the data we got in the previous
days/weeks.

The Canadian June
Employment chant printed at 59.9K vs. 20.0K expected and -17.3K prior. The
unemployment rate ticked higher to 5.4% vs. 5.3% expected and 5.2% prior. The participation
rate printed at 65.7% vs. 65.5% prior.

The highlights for
next week include:

• Tuesday: UK jobs data.
• Wednesday: RBNZ
  rate decision, US CPI, BoC rate decision.
• Thursday: US Jobless
  Claims, US PPI.
• Friday: University
  of Michigan Consumer Sentiment.

That’s all folks, have a great weekend!

This article was written by Giuseppe Dellamotta.

MoneyMaker FX EA Trading Robot