The June NFP report this Friday is the most important economic event of the trading week. With inflation reaching the Fed’s threshold, investors turn their attention to job creation.
The Fed sent a hawkish message to the markets at its last meeting, solely based on higher inflation. But its dual mandate calls for improvements in the labour market as well. Therefore, investors have shrugged off the hawkish message on expectations that the Fed will not act until the job market picks up.
But what if the NFP report due to come out next Friday were to show such improvements?
Main Events To Consider in the Trading Week Ahead
The week ahead is marked by the end of the month flows. Wednesday is the last trading day of the month, and volatility surrounding the main fixing times should be higher than normal.
No important event is scheduled for today, except for the FOMC member Williams’ speech that might move the markets. Tomorrow, the Conference Board Consumer Confidence in the United States is expected at 118.9, with the bias that the actual release will exceed expectations. However, this is a second-tier event, unlikely to move the markets until the all-important NFP report on Friday.
Wednesday is the last trading day of the month and a day packed with important economic events for the currency trader. Euro traders will monitor the CPI Flash Estimate release, US dollar traders will have an eye on the ADP Non-Farm Employment Change (a.k.a. private payrolls), the pending home sales, and the Chicago PMI. Finally, Canadian dollar traders should pay attention to the monthly GDP data expected to decrease by 0.8% and the crude oil inventories.
OPEC-JMMC meetings start next Thursday. With the price of oil trading comfortably above $70, it should be interesting to see the message out of this week’s meetings. Also released on the same day is the ISM Manufacturing, and market participants will focus on the change in the employment levels in the manufacturing sector.
Finally, the main event of the trading week is released on Friday. The market expects that the US economy created 700k jobs in June, and that the unemployment rate declined to 5.7%. Any positive surprise, either from the actual release or from revisions to the past data, should bode well for the American dollar.