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Abstract:The latest data for the U.S. ISM Manufacturing PMI, released on August 1, 2024, shows a decline to 46.8, down from 48.5 in June. This marks the sixth consecutive month of contraction (a reading below 50) and remains well below the historical average of 52.88. On July, the Bank of Canada (BoC) announced a 25-basis-point cut in its benchmark interest rate, reducing it to 4.5%. This was the second consecutive rate cut, following a similar move in June. The latest ADP Nonfarm Employment Change for..
The Week Ahead: Week of 2September (GMT+2)
Fed Rate Cut Calls, Would NFP Tilt The Odds?
Tuesday, 3 September 2024, 16:00
US ISM Manufacturing PMI (Aug)
The latest data for the U.S. ISM Manufacturing PMI, released on August 1, 2024, shows a decline to 46.8, down from 48.5 in June. This marks the sixth consecutive month of contraction (a reading below 50) and remains well below the historical average of 52.88.The continued contraction indicates ongoing challenges in the U.S. manufacturing sector, driven by weak demand, a drop in production, and cautious investment behavior among companies due to the current monetary policy environment. Given the recent trend, the upcoming data is likely to remain in contraction territory which potentially around mid-40s.
Wednesday, 4 September 2024, 15:45
BoC Interest Rate Decision
On July, the Bank of Canada (BoC) announced a 25-basis-point cut in its benchmark interest rate, reducing it to 4.5%. This was the second consecutive rate cut, following a similar move in June. The decision was largely driven by signs of cooling inflation and a slowing economy. In June, inflation in Canada eased to 2.7%, providing the BoC with the confidence that price pressures were abating. Additionally, there were indications of a slowdown in the labor market and retail sales, further supporting the decision to lower rates.Looking ahead, many economists expect the BoC to continue cutting rates gradually throughout the year, with some predicting the policy rate could reach 4% by the end of 2024. However, the upcoming meeting is unlikely to surprise regarding the current interest rate, as most analysts anticipate another rate cut likely in September.
Thursday, 5 September 2024, 14:15
US ADP Nonfarm Employment Change (Aug)
The latest ADP Nonfarm Employment Change for July showed an increase of 122,000 jobs, which was below the forecast of 147,000 and significantly lower than the previous month's figure of 209,000.This slowdown in job creation suggests a cooling labor market, which could be a response to rising interest rates and tightening financial conditions aimed at controlling inflation. Businesses are becoming more cautious with hiring amid economic uncertainties and are expected to continue given the recent signal from Federal Reserve. Therefore, the upcoming release is expected to continue showing slower job growth.
Friday, 6 September 2024, 14:30
US Nonfarm Payrolls (Aug)
The U.S Nonfarm U.S. Nonfarm Payrolls (NFP) data for July 2024 showed an increase of 114,000 jobs, which is significantly lower than the average monthly gain of 215,000 jobs over the prior 12 months. The lower-than-expected NFP figure attributed to several factors which include ongoing uncertainties in the global economy and the impact of rising labor costs may have contributed to the slower job growth. For the upcoming report, the data is expected to continue reflecting economic challenges with job growth remain subdued.Additionally, any significant deviation in the upcoming ADP data which is often seen as a precursor to the official NFP data could further influence expectations for the next NFP release
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The U.S Producer Price Index (PPI) for June showed a month-over-month increase of 0.2%, which was slightly above market expectations of 0.1%. The Reserve Bank of New Zealand (RBNZ) recently kept its Official Cash Rate (OCR) unchanged at 5.50% during its last meeting on July 2024, which was consistent with market expectations. As of June 2024, the U.S. Consumer Price Index (CPI) showed a modest increase of 3.0% year-over-year, weaker than market expectation and previous reading of 3.1% and 3.3%..
The Japanese Yen strengthened against the US Dollar after the Bank of Japan's hawkish policy move, raising rates by 15 basis points and reducing bond purchases. Japan's Ministry of Finance also spent ¥5.53 trillion ($36.8 billion) in July to stabilize the Yen. Meanwhile, the US Dollar weakened as the Federal Reserve maintained interest rates. Traders now await US economic data, including the ISM Manufacturing PMI and Initial Jobless Claims, for further guidance.
The latest S&P Global US Manufacturing PMI for June 2024 has been revised to 51.6, slightly lower than the expectation of 51.7 but up from 51.3 in May. In its most recent decision in June, the Bank of Canada (BoC) reduced its key interest rate by 25 basis points, lowering it from 5% to 4.75% in response to easing inflation indicators. In the first quarter of 2024, the US economy expanded at an annualized rate of 1.4%, slightly surpassing market expectations of 1.3%. This growth marked a...
Federal Reserve Chair Jerome Powell indicated that recent U.S. economic data suggest inflation is returning to a downward trajectory. However, he emphasised the need for more evidence before the Fed considers shifting its current monetary policy. Consequently, the dollar eased from its recent highs, while U.S. equity markets, buoyed by the dovish tone, saw the Nasdaq and S&P 500 reaching all-time highs.