Introduction
This week, three main events are dominating global markets' attention: US labor market data, released at an exceptional time; European inflation data; and the European Central Bank's annual meeting. These events will collectively shape the contours of global monetary policy in the coming months.
US Labor Market Data: Why is it Released at an Exceptional Time?
US labor market data is released on Thursday instead of the usual Friday, as markets are closed on July 4th for Independence Day.
This timing lends the data added weight. Nine out of 19 Federal Reserve officials have indicated their openness to raising interest rates by the end of 2026, a notable shift compared to the March meeting when none of them expressed such a view.
| Scenario | potential rate impact | potential market impact |
| Strong data: high job gains + rising wages + unemployment at 4.3% | Reinforce rate-hike expectations | Bearish for gold, silver, and risk assets — Bullish for USD and bond yields |
| Weak data: job miss or wage slowdown | Revives ‘hold’ scenario and delays hike | Reopens easing debate ahead of the September meeting |
Weak data suggests an unchanged interest rate and reopens the easing debate before the September meeting.
It's worth noting that markets will receive three different inflation readings before the Federal Reserve's upcoming meeting on September 16, making each data point of significant analytical weight this week.
Performance of Major Economies
First, the US economy
Hanging expectations prevail in the US, with a potential quarter-point interest rate hike given the high inflation data. This trend will be reinforced if the labor market data is strong, as high purchasing power supports keeping inflation at elevated levels for a longer period. Key Data to Watch:
• Monday: Consumer Confidence Index and House Price Index
• Tuesday: ISM Manufacturing Report and Factory Orders for May
• Wednesday: JOLTS Employment Opportunities Index for May and ADP Private Sector Wages for June
• Thursday: NFP Headline and Weekly Unemployment Claim
Second. The European Economy
European Central Bank Forum
The European Central Bank (ECB) is holding its annual two-day forum until July 1st, focusing this year on innovation, growth, and economic stability. Investors are watching the forum closely for further clues about the direction of monetary policy, which currently leans toward maintaining a hawkish stance.
Markets will be watching the preliminary Eurozone inflation data for June on Wednesday, which will provide clues about how far the ECB might be willing to go in tightening monetary policy.
Business and consumer surveys for the Eurozone for June are due on Monday, followed by German retail sales data for May and German unemployment data for June on Tuesday. Eurozone unemployment data for May will be released on Thursday.
Third. Asian Economy
Japan will release several indicators, including the Bank of Japan's survey of businesses to gauge the impact of geopolitical tensions on company performance and sentiment, along with retail sales figures, industrial production data, and unemployment figures.
China, on the other hand, will release its Purchasing Managers' Index (PMI), giving a clearer indication of business sentiment, with expectations that the official manufacturing PMI will rise slightly, compared to a decline in the index for non-manufacturing sectors.
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