The upcoming week is filled with important events that could impact the global markets. On Monday, the People’s Bank of China (PBoC) is expected to maintain the Loan Prime Rate (LPR) at 3.45% for the 1-year and 3.95% for the 5-year. This decision is closely watched as it is indicative of the central bank’s monetary policy stance. The PBoC recently introduced a new cash management mechanism, which is important to note.
Wednesday will see the release of Flash Purchasing Managers’ Index (PMI) data for major economies such as the Eurozone, UK, and US. These figures provide insight into the health of the manufacturing and services sectors in these regions. The Bank of Canada (BoC) is also expected to announce a 25 bps interest rate cut, bringing the policy rate to 4.50%.
On Thursday, the US will release Durable Goods Orders, Jobless Claims, and Q2 Advance GDP data. Of particular interest is the Jobless Claims data, which provides a timely indication of the labor market’s health. The continuous rise in Continuing Claims is a cause for concern, indicating subdued hiring levels.
Friday will see the release of Tokyo Core CPI and US Core Personal Consumption Expenditures (PCE) data. In Japan, inflation is expected to remain stable, while in the US, PCE is expected to show a slight decline. The Federal Reserve is closely monitoring inflation data as it considers its monetary policy stance.
Overall, the market is anticipating further easing from central banks, with expectations of rate cuts in both Canada and the US. The Fed is expected to maintain a dovish tone in its upcoming meeting but may not commit to a rate cut. Investors will be closely watching upcoming economic reports for further guidance on central bank actions. Stay tuned for more updates on these key events throughout the week.