As we begin the week of June 29th, we are providing our regular update on the significant macroeconomic events scheduled for the coming period. We will also briefly recap last week's developments: while geopolitical factors continued to be the primary influence on market sentiment, some fundamental data began to emerge. A key highlight was the reopening of the Strait of Hormuz, with oil flows resuming, which was reflected in oil prices retreating to levels near the lows seen at the start of the previous week. However, news of escalating tensions between the US and Iran, as well as in Lebanon over the weekend, may put some pressure on market sentiment at the start of this week. Additionally, there was a substantial amount of fundamental data released last week. The most closely watched was the US Core PCE data—another inflation indicator—which came out largely as anticipated. Consumer Price Index data from the Australian market also showed a decline, with an overall slightly softer performance. The Australian dollar faced pressure, but overall volatility remained elevated, with traders expecting a week still filled with uncertainty.
Before diving into daily analysis, the most significant central bank event this week is the European Central Bank's annual forum in Sintra, Portugal, where top central bank officials will gather. We have some scheduled speeches to hear, including from ECB President Christine Lagarde, Bank of England Governor Andrew Bailey, Bank of Canada Governor Tiff Macklem, and of course, Federal Reserve Chair Kevin Warsh. I will elaborate on these later. I believe this meeting is scheduled for Wednesday, potentially not officially starting until Monday, so the week may begin on a somewhat challenging note. As mentioned, market focus remains heavily concentrated on the Middle East situation, particularly developments in the Strait of Hormuz. We know that Iranian forces sank a cargo ship in the strait on Thursday, with the US subsequently taking retaliatory measures. An exchange of fire and countermeasures is ongoing, and traders will be closely monitoring developments throughout the weekend and their aftermath.
Key Events for Monday
On Monday morning, we can get a brief overview during the Asian session before turning to the actual calendar. Trading volume on Monday is light, with little to spark significant interest. I mentioned the Asian session, where geopolitics will likely dominate over retail sales data. The Japanese market typically doesn't see large moves later in the day. The London session is different, with Italy on holiday, which may affect local liquidity. Our first major update later in the day will be ECB President Christine Lagarde's opening remarks at the central bank forum in Sintra. She is expected to address the dominant geopolitical situation on Monday, but as the week progresses, the fundamental perspective will become increasingly relevant.
Looking Ahead to Tuesday
Moving into Tuesday, the Asian trading session is relatively quiet. Most of the week is expected to be calm for Asian markets, with few significant data releases or central bank updates. However, the London and New York sessions are packed with scheduled data. Entering the London session on Tuesday, preliminary German Consumer Price Index data is due, with an expected rise of 0.1% (median). This data is released state-by-state, typically throughout the morning, so some volatility in the euro is anticipated. In the New York session, Canadian GDP data is on the agenda again. Last month's year-over-year figure showed a 0.1% decline, while this time a significant rise to 0.4% is expected. Keep a close eye on this, as it could bring volatility for the Canadian dollar. As the day progresses, market dynamics will continue to evolve. In the New York session, we receive some key US data. As I should have mentioned earlier, US employment data this week is very significant, with Non-Farm Payrolls due on Thursday. But the first data points are Tuesday's CB Consumer Confidence, expected at 94.2 down from the previous 93.1, and the important JOLTS Job Openings number, forecast at 7.28 million, down from the previous 7.62 million. This slight decrease could signal some movement in US employment figures.
Wednesday's Market Drivers
Starting Wednesday, as I said before, Asian markets are generally quiet, with the week focusing more on secondary and tertiary data, though some releases begin in the Asian session. The London market sees a slight uptick in activity on Wednesday. EU CPI data is due, with the core CPI year-over-year forecast at 2.5%, unchanged from before, and the headline CPI forecast at 3.0%, down from the previous 3.2%, showing a slight cooling trend consistent with observations in the Middle East. When we enter the New York session, things get very interesting, representing a crossover point between New York and the Middle East. The European session on Wednesday has numerous events, starting with Canada Day. I believe the Canadian market is on holiday, so the Canadian dollar is expected to be more volatile than usual, in addition to the US employment data. The ADP Non-Farm Employment Change is expected to be released earlier in the week, currently forecast at 118,000 new jobs. Subsequently, major news from Sintra will be released, gathering all the key major institutions. First, we will hear from Bank of Canada Governor Tiff Macklem, ECB President Christine Lagarde, Bank of England Governor Andrew Bailey, and Fed Chair Kevin Warsh all participating in a simultaneous discussion, sharing their policy views. I believe these officials will speak concurrently, which could lead to significant market volatility later in the day. Furthermore, more key data is on the US agenda, including the ISM Manufacturing PMI. Inflation-related data continues to flow, with the Manufacturing PMI forecast at 53.7, down from the previous 54.0, and the ISM Manufacturing Prices Index retreating to 79 from 82.1, lower than the last period. Later in the day, ECB President Christine Lagarde will deliver closing remarks, which is also when Sintra begins consolidating information on Thursday (or Wednesday), with各方 vying to make this the busiest and most turbulent day of the week.
Thursday: Non-Farm Payrolls Day
Thursday is Non-Farm Payrolls report day. Because the US market is closed on Friday for the Independence Day holiday, the NFP data is released a day early on Thursday. Before these NFP figures are released in the Asian session, I realize data during the Asian trading hours could set new records. The London session will see the release of key Swiss CPI data, with the month-over-year figure expected to show 0.1% growth, so some minor volatility in EUR/USD is anticipated, especially if the actual figure misses expectations. However, the most important data of the week is the Non-Farm Payrolls. We all remember the last release, so attention is very high this time as the previous number was indeed strong. This NFP figure is forecast at 114,000, while the previous was 172,000, so it's broadly in line with prior expectations. The Unemployment Rate is expected to remain unchanged at 4.3%. Regarding Average Hourly Earnings, I think there is a monthly uptrend, forecast at 0.3% growth. Weekly Unemployment Claims will also be released at the same time, expected at 220,000. This is a very significant data release, and trading on Thursday is expected to be highly active, especially if there are large swings. The last trading day of the week in the US could see substantial price movements. Another key point is that the NFP data, which I mentioned earlier would be released on Friday, is actually on Thursday.
Friday's Outlook and Closing Thoughts
I believe the most noteworthy aspect for markets on Friday is the US side, with little on the schedule, so traders might expect relatively lighter conditions. But we know that geopolitical news could still emerge, particularly new developments from the Middle East, which would have a very limited impact on data. We will hear from more central bank heads again: ECB President Lagarde is in France participating in an event alongside Bank of England Governor Andrew Bailey, both are speaking. However, I don't think their updates will be as impactful as expected, as we've heard from them multiple times earlier in the week. Due to the US market closure, liquidity will carry a slight premium, while the Canadian market has of course reopened. But the final hours on Friday could see significant volatility. My personal small hunch is that, if things really develop to that point, Japanese authorities are clearly not satisfied with the yen's exchange rate levels—if I were them, I would think that. An important US holiday is approaching, and the major US data released previously could be key. Be sure to watch the action on Friday afternoon, leading into what promises to be a very busy week of trading. Focus will be on Federal Reserve policy, while US economic data and geopolitical developments may also induce volatility.
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