Markets enter a rather busy week in terms of geopolitical developments and economic data. A flared-up US-China trade war will continue to affect the market as the two sides continue to engage in accusations and a war of words.
Consumer price index data from Turkey, Germany, and the Eurozone, the gross domestic product from Canada, and the United Kingdom along with the US job figures will be watched as the markets keep an eye on renewed tensions between totalitarian North Korea capitalist South Korea.
Brexit trade negotiations
“Intensified” talks to regulate post-Brexit trade relations between the EU and the UK begin on Monday.
The talks between EU chief negotiator Michel Barnier and his British counterpart David Frost will this time be conducted face-to-face in Brussels.
Both Brussels and London insistently expressed their willingness to reach a trade agreement despite the deep differences between them, but time is running out. The post-Brexit transition period, which has enabled Britain to temporarily maintain its former relationship with the EU, ends on December 31. UK Prime Minister Boris Johnson still has until Wednesday to extend that period but he consistently refused the idea.
US second wave
Some US states, including California, Texas, and Florida continue to report higher than usual Covid19 cases in what the experts call a second wave in the US as the American world markets remain sensitive to the virus outbreak there.
The Trump administration’s calls on the states to open their economies amidst the anti-police protests and riots might have backfired.
Fauci, Mnuchin and Powell at Congress
Washingon’s response to the new wave will be reviewed by lawmakers and the public in two sessions at Congress on Tuesday. First, Dr. Anthony Fauci, a member of Trump’s team to counter Covid19 and head of the National Institute for Allergy and Infectious Diseases, will testify in front of the Senate’s health, education, labor, and pension committee.
Later, US Federal Reserve Chairman Jay Powell and Treasury Secretary Steven Mnuchin will answer the financial services committee on the financial and monetary policy aid by the administration and the Fed.
China, Taiwan and Hong Kong
Chinese capital Beijing’s local government will hold a press conference on a fresh outbreak. A steep rise in Beijing numbers has worried global markets. The number of cases there is approaching 300.
In Democratic China, more commonly known as Taiwan, the government will open an office to help Hong Kong residents and businesses move in response to the Communist regime’s increasing control of the city-state.
Taiwanese President Tsai Ing-wen’s government is already at odds with Beijing as her government harbors pro-democracy activists from Hong Kong.
Minutes from the US Federal Reserve’s latest monetary policy meeting on June 9–10, will be released Wednesday. At the press conference after the meeting, Fed Chairman Jay Powell made a bleak assessment of the economic effects of the coronavirus and made it clear that there would be no increase in interest rates till at least 2022.
The minutes will provide investors with more detailed information, including the Federal Open Market Committee’s economic recovery prospects and the measures it is considering to take to prevent further damage.
US non-farm payrolls, unemployment rate, and hourly wages are to be announced on Thursday this week.
The jobs figure is set earlier due to Independence Day.
The May employment report came in at a shockingly better than expected figure of 2.5 million. Since states have gradually opened up their economies over the past few weeks employment is once again expected to have ticked up although not as good as the May figure.
However, due to the second wave, the weekly unemployment benefit claims are expected to have remained over one million for a straight 15th week.
Monday: German CPI, US Pending Home Sales
Tuesday: China Manufacturing PMI, UK GDP, Eurozone CPI, Canada GDP, US CB Consumer Confidence, Japan Tankan Large Manufacturers Index, Japan Tankan Large Non-Manufacturers Index
Wednesday: Canada — Canada Day, China Caixin Manufacturing PMI, Germany Manufacturing PMI, Germany Unemployment Change, UK Manufacturing PMI, US ADP Nonfarm Employment Change, US ISM Manufacturing PMI, US Crude Oil Inventories, US FOMC Meeting Minutes
Thursday: US Initial Jobless Claims, US Nonfarm Payrolls, US Unemployment Rate
Friday: United States — Independence Day, Australia Retail Sales, UK Composite PMI, UK Services PMI