The Week Ahead: Key Economic Events and Earnings to Watch

Looking ahead to the week of August 5 to August 9, 2024, a number of significant economic events are scheduled to occur. These events are of great importance to traders and investors as they have the potential to cause substantial market volatility and impact trading decisions.

Monday 14:00 (GMT+0) – USA: ISM Non-Manufacturing PMI (USD)
Tuesday 05:30 am (GMT+0) – Australia: RBA Interest Rate Decision (AUD)
Tuesday 09:00 (GMT+0) – Europe: Retail Sales m/m (EUR)
Tuesday 22:45 (GMT+0) – New Zealand: Employment Change q/q (NZD)
Wednesday 14:00 (GMT+0) – Canada: Ivey PMI (CAD)
Friday 12:30 (GMT+0) -Canada: Employment Change (CAD)

ISM Non-Manufacturing PMI (USD)

The US ISM Non-Manufacturing PMI is a key economic indicator that measures business activity in the non-manufacturing sector. It is based on surveys of purchasing and supply executives and includes metrics like business activity, new orders, employment, and supplier deliveries. A reading above 50 implies expansion, while below 50 indicates contraction. This index provides insights into the economic health and trends within the service sector of the US economy.

In June 2024, the ISM Services PMI in the US fell to 48.8, the sharpest contraction since April 2020, and below market forecasts of 52.5. Survey respondents reported generally flat or declining business, with some commodities still costly despite easing inflation. Slower supplier deliveries were primarily due to transportation challenges.

Analysts are optimistic about the upcoming survey. They anticipate an increase of 51.3, which may positively impact the US dollar.

RBA Interest Rate Decision (AUD)

On June 18, 2024, the Reserve Bank Board kept the cash rate at 4.35% and the interest rate on Exchange Settlement balances at 4.25%. Inflation remains above target, though it has fallen since its 2022 peak. The economic outlook is uncertain, with slow GDP growth, rising unemployment, and persistent cost pressures. The Board aims to return inflation to the 2-3% target range by late 2025 but acknowledges potential risks and uncertainties, including global economic conditions and geopolitical tensions. The Board is committed to monitoring data and adjusting policies as needed to achieve its inflation target.

Analysts appear to agree that the RBA will keep the cash rate unchanged during this week’s meeting.

Retail Sales m/m (EUR)

European retail sales, as reported by Eurostat, measure the total sales volume of goods and services to consumers in the retail sector across EU member countries. This data is adjusted for seasonal and calendar variations to provide an accurate picture of consumer demand and economic activity within the region.

In May 2024, retail trade in the euro area and the EU increased by 0.1% compared to April 2024. Annual retail trade rose by 0.3% in the euro area and 0.6% in the EU. Monthly, food, drinks, and tobacco sales grew, while non-food product sales decreased.

Economists and investors expect a contraction in sales of 0.2%.

Employment Change q/q (NZD)

New Zealand’s quarterly employment change indicator, released by Statistics New Zealand, measures the percentage change in the number of employed individuals within the country compared to the previous quarter. A reading that exceeds expectations should be viewed as a positive/bullish sign for the New Zealand Dollar, whereas a reading that falls below expectations should be seen as a negative/bearish indication for the NZD.

In the previous quarter, employment fell 0.2%, missing estimates of a 0.3% increase, while wage inflation slowed for a fourth straight quarter.

Analysts forecast a 0.3% decrease in employment for two consecutive negative quarters, following a previous dip.

Ivey PMI (CAD)

The Ivey Purchasing Managers Index (PMI), prepared by the Ivey Business School, measures monthly changes in economic activity across all sectors in Canada based on data from purchasing managers. The index is a valuable tool for predicting Canadian macroeconomic trends, as detailed in the White Paper “The Predictive Value of the Ivey PMI for Monthly Canadian GDP.”

According to the June release of the Ivey Purchasing Manager’s Index, the index for June was 62.5, indicating an increase in purchases compared to the previous month.

Analysts and investors anticipate that July’s Ivey Purchasing Managers’ Index could decrease to 56.5. A reading above 50.0 signals industry expansion, which is favorable for the Canadian Dollar. Conversely, a reading below 50.0 indicates contraction, which may negatively impact the Loonie.

Employment Change (CAD)

In June, employment exhibited stability, showing a marginal decline of 1,400 jobs. Moreover, the employment rate experienced a 0.2 percentage point reduction, settling at 61.1%.

Conversely, the unemployment rate saw an increase of 0.2 percentage points, reaching 6.4% in June. Notably, this represents a cumulative surge of 1.3 percentage points since April 2023.

Economists appear optimistic about the addition of 18.2K new jobs in July.

Tuesday, August 6: DEV (Devon Energy Corp.)
Tuesday, August 6: CAT (Caterpillar Inc.)
Wednesday, August 7: DIS (The Walt Disney Company)
Wednesday, August 7: CCEP (Coca-Cola European Partners PLC)