Even though the United States celebrates Independence Day on Wednesday, there is no lack of market-moving activity both here at home and globally. Between the impending tariffs between the U.S. and China and nonfarm payrolls on Thursday, there’s lots to anticipate as the week progresses.
Politics pushing down euro, pound
A series of Markit manufacturing PMIs for the Eurozone and the United Kingdom were released this morning, but they were largely overshadowed by political uncertainty in the region. This added to the dollar’s strength off of trade uncertainty.
Manufacturing PMIs for the Eurozone slightly missed expectations and U.K. manufacturing beat expectations, but the respective currencies had bigger complications.
The EUR/USD pair slipped Monday morning after Germany’s coalitions partners expressed dissatisfaction with the E.U. migration deal reached last week. And GBP/USD took a dive on a report that the U.K.’s chief Brexit negotiator told ministers that the there’s no chance of a bespoke deal with the E.U.
These issues will likely be topics of conversation as the week continues. U.K. Prime Minister Theresa May is hosting her cabinet for a sleepover at her Chequers country estate July 5 and 6 in order to hammer out how clean of a break they want from the E.U.
Week pauses for Fourth of July holiday
Midweek will be a little quieter as U.S. stocks and bond markets are closed for Independence Day. Government offices, banks and many businesses (including the WorldFirst U.S. office) will also be taking the day off.
Despite the national holiday, there is a lot of pending activity coming out of the White House this week. The self-imposed deadline by the Trump administration to enact tariffs on $34 billion in Chinese goods begins Friday.
Fed minutes on Thursday
Investors can come back from the holiday ready to dig through the Federal Reserve’s meeting minutes from the June 12-13 FOMC meeting.
During that meeting, the FOMC decided to raise interest rates for the second time this year, so getting more insight into this decision is key for a lot of market watchers. We’ll also get more insight into the forecasted four total rate increases for 2018.
Nonfarm payrolls lead data-filled Friday
Besides the beginning of U.S.-China tariffs, Friday will also be filled with a series of data releases from the U.S. and Canada.
The U.S. June labor market report comes out at 8:30 a.m. EST, when we will learn more about the unemployment, average hourly earnings, and the ever-important, but highly volatile nonfarm payrolls.
The number of non-agricultural jobs created during June is expected to slow to 190,000 compared to 223,000 in May. Average hourly earnings are estimated to remain at 2.7% for the month.
Canada will also announce the unemployment rate for June.