The Week Ahead: 2nd – 6th August 2021

Overview for the Week Ahead

The dollar was down on Monday morning in Asia. The greenback opened a busy week ahead, including the latest U.S. jobs report and a Reserve Bank of Australia (RBA) policy decision, just above a one-month low. Crude oil slid. 

The U.S. jobs report for July will be the highlight in the week ahead with investors on the watch for any catalysts that could encourage the Federal Reserve to tighten monetary policy sooner. The economic calendar also features the Institute for Supply Management’s PMIs along with data on factory orders and initial jobless claims. Earnings will continue to dominate headlines, with more than a quarter of S&P 500 companies set to report in the coming week. The crackdown by Chinese market regulators could continue to be a major story and in the UK the Bank of England is to hold its latest policy meeting where it is likely to echo the Fed’s view that there is still some way to go before stimulus can be reduced. Here is what you need to know to start your week. 

Friday’s U.S. non-farm payrolls report will provide fresh clues on the strength of the economic recovery and inform the outlook for Fed policymakers. 

Economists are expecting the economy to have added 900,000 jobs in July after a forecast-beating 850,000 in June. 

Last week Fed Chair Jerome Powell said the job market still had “some ground to cover” before it would be time to start scaling back stimulus measures the central bank enacted in the spring of 2020 to combat the economic fallout from the coronavirus pandemic. 

In June Fed officials began debating how to wind down bond purchases but there is no clear timetable yet for when it will begin pulling back emergency market support measures. 

Aside from the jobs report, the economic calendar also features other important data including the Institute for Supply Management’s manufacturing data Monday and service sector data on Wednesday. The ISM manufacturing PMI is expected to remain robust, but to again underline supply-side strains in the economy that are contributing to higher inflation. 

Data on factory orders is slated for Tuesday and the weekly report on initial jobless claims is on Thursday. Jobless claims have fallen considerably since the start of the year amid growing labour demand but the delta variant that’s fuelled a recent surge in new infections across the country poses a risk. 

The Bank of England is expected to keep stimulus running at its current pace when it meets on Thursday, despite some disagreement among policymakers over the size of its bond-buying program against a background of rising inflation and an improving economy. 

So, what to watch for at the BoE meeting? Officials are likely to raise their inflation forecast for this year, but the outlook for growth remains uncertain amid concerns over the delta variant. 

Also, after two policymakers recently broke ranks to advocate for an early end to its bond-buying stimulus scheme, it will be interesting to gauge whether more officials are coming around to that view. 

Pfizer Inc and Moderna Inc have raised the prices of its COVID-19 vaccine in the latest European Union supply contracts, The Financial Times reported https://on.ft.com/3j8mbTb on Sunday.   

The new price for the Pfizer shot was 19.50 euros ($23.15) against 15.50 euros previously, the newspaper said citing to the portions of the contracts seen. 

The price of a Moderna vaccine was $25.50 a dose, the contracts show, up from 19 euros in the first procurement deal but lower than the previously agreed $28.50 because the order had grown, the report said, citing one official close to the matter. 

Pfizer and Moderna can dictate terms, as the world still grapples with the novel coronavirus, especially with the emergence of variants. 

The EU is also under pressure to procure more supplies, as countries within the block have decried unfair vaccine distribution among member nations, the FT reported. 

Pfizer’s second-quarter results released last week showed that the pharma giant clocked in COVID-19 vaccine revenues of roughly $8 billion in the second quarter. The company also raised its vaccine revenue forecast for 2021 from $26 billion to $33.5 billion. 

This Week’s High Impact Events 

The times below are GMT +3. 

Monday 2nd August    

  • 17.00 – US – ISM Manufacturing PMI  

Potential instruments to Trade: USD Crosses. 

Tuesday 3rd August 

  • 07.30 – Australia – RBA Rate Statement & Cash Rate 

Potential instruments to Trade: AUD Crosses.  

  • 10.00 – Europe – Spanish Unemployment Change  

Potential instruments to Trade: EUR Crosses.  

Wednesday 4th August 

  • 01.45 – New Zealand – Employment Change q/q & Unemployment Rate  

Potential instruments to Trade: AUD Crosses.  

  • 15.15 – US – ADP Non-Farm Employment Change 

Potential instruments to Trade: USD Crosses. 

  • 17.00 – US – ISM Services PMI 

Potential instruments to Trade: USD Crosses. 

  • 17.30 – US – Crude Oil Inventories 

Potential instruments to Trade: USD & CAD Crosses. 

Thursday 5th August 

  • 14.00 – UK – Asset Purchase Facility, BOE Monetary Policy Report, MPC Asset Purchase Facility Votes, & Monetary Policy Statement 

Potential instruments to Trade: GBP Crosses. 

  • 15.30 – US – Unemployment Claims 

Potential instruments to Trade: USD Crosses. 

Friday 6th August 

  • 02.00 – Australia – RBA Gov. Lowe Speaks 

Potential instruments to Trade: AUD Crosses. 

  • 04.30 – Australia – RBA Monetary Policy Statement 

Potential instruments to Trade: AUD Crosses. 

  • 14.15 – UK – MPC Member Broadbent Speaks 

Potential instruments to Trade: GBP Crosses. 

  • 15.30 – Canada – Employment Change & Unemployment Rate 

Potential instruments to Trade: CAD Crosses. 

  • 15.30 – US – Non-Farm Payrolls, Average Hourly Earnings m/m, & Unemployment Rate 

Potential instruments to Trade: USD Crosses. 

  • 17.00 – Canada – Ivey PMI 

Potential instruments to Trade: CAD Crosses. 

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