Below are the most important global events likely to affect FX and bond markets in the week starting Aug. 3.
U.S. monthly jobs data for July will provide the focus of attention as investors gauge the prospects for interest rates over the next few months.
The Federal Reserve left interest rates on hold at its recent meeting, with Chairman Kevin Warsh giving away few clues on the prospects of rate increases in future, making key economic data releases all the more important.
In Europe, further economic data in the eurozone will provide a steer on how the region is faring amid elevated energy prices. In Asia, China's trade and inflation data will test regional demand and export momentum, while regional PMIs will show if manufacturing activity has continued to show resilience in the face of global uncertainties.
Central bank decisions are due in India, Brazil and Mexico, while investors will continue to watch developments in the conflict between U.S. and Iran and moves in oil prices.
U.S.
Nonfarm payrolls data for July on Friday will be the highlight of a busy week for U.S. economic data.
Investors have already scaled back expectations for interest-rate hikes by the Federal Reserve after the central bank left interest rates on hold. Fed Chairman Warsh stuck to his pledge not to provide forward guidance while suggesting that financial markets were already tightening financial conditions via higher bond yields.
Recent U.S. jobs data have been weak and further evidence of this could cause investors to reduce rate-hike expectations even further. Having fully priced a rate increase in September prior to the Fed's recent meeting, money markets now price a 68% chance of this, LSEG data showed.
"Any disappointment in U.S. data should lead to a larger dovish repricing than before, particularly if oil prices come under renewed pressure," ING currency analyst Francesco Pesole said in a note.
Markets are concerned that the Fed "may be reluctant to translate its price stability rhetoric into effective policy tightening," he said.
Ahead of Friday's data, JOLTS job openings data Tuesday, ADP private payrolls figures for July on Wednesday and jobless claims figures Thursday will give further clues on the health of the jobs market.
In addition, the ISM surveys for July on manufacturing on Monday and services on Wednesday will give a picture of how business activity is faring in the face of high energy prices.
U.S. trade data for June are also due Tuesday.
The Treasury's quarterly refunding announcement with borrowing estimates is scheduled for Monday and the refunding policy statement and auction details are due on Wednesday.
The substantial rise in Treasury yields across maturities is likely the most critical factor arguing against any policy moves toward raising supply of notes or bonds, or even simply shifting forward guidance, HSBC U.S. rates strategist Dhiraj Narula said in a note.
"Long-dated rates sit at multidecade highs, and we expect policymakers to remain wary of shifts that would drive up term premium and raise borrowing costs further," he said.
There are no sales of notes or bonds due during the week.
Canada
Canadian jobs data for July are due Friday and will provide further clues on how well the economy is performing in the face of high energy costs and U.S. tariffs.
These figures will follow recent strong Canadian gross domestic product data for the second quarter, which analysts said could increase the prospects of a rate hike from the Bank of Canada this year.
Canadian money markets currently price around a 70% chance of a quarter-point rate hike in December and fully price a move in January 2027, LSEG data showed.
Canadian trade data for June are also due Tuesday.
Latin America
Brazil's central bank announces its policy decision on Wednesday, followed by Mexico's central bank, Banxico, on Thursday.
The drop in Brazil's July midmonth inflation reading to 4.5% from 4.8% a month earlier provides scope for the central bank to deliver another 25 basis-point interest-rate cut to 14.00% at the upcoming meeting, Capital Economics economist Liam Peach said in a note.
However, the bar for further rate cuts in Brazil over the rest of the year has risen given energy-related inflation risks, he said.
In Mexico, interest rates are likely to be left unchanged at 6.50%.
Policymakers could strike a less "dovish" tone, however, given the stronger-than-expected 1.5% quarter-on-quarter expansion in Mexico's gross domestic product in the second quarter, Capital Economics economist Kimberley Sperrfechter said in a note.
The balance of probabilities looks tilted toward a rate rise over the next six months or so, she said.
Mexico's central bank said it was ending its policy easing cycle in May when it cut rates by 25 basis points.
Eurozone
Eurozone data will continue to be watched closely as accelerating energy costs remain a drag on the region's economy due to the military conflict in the Middle East and disruptions to energy supply.
"In the end, the duration of the conflict will be key," Marcus Widen and Pia Fromlet, economists at SEB, said in a note. "Most recent developments have increased inflation risks," they said.
July manufacturing purchasing managers' data for Spain, Italy, France, Germany and the eurozone are due on Monday, followed by purchasing managers' data for services on Wednesday.
Spanish unemployment figures for July and Italian retail sales for June are due on Tuesday, followed by eurozone producer prices for June Wednesday.
Spanish and Italian industrial production for June are due Thursday, alongside eurozone retail trade data. German manufacturing orders and industrial production figures for June are due on Thursday and Friday, respectively.
Germany will auction September 2028-dated treasury notes, or Schatz, on Tuesday, and April 2029-, February 2035- and August 2053-dated green bonds on Wednesday. Other countries issuing bonds are Austria on Tuesday, and Spain and France on Thursday.
U.K.
The U.K. data calendar is relatively quiet, with the final release of the manufacturing purchasing managers' index for July due on Monday, followed by the equivalent reading for services on Wednesday.
The Bank of England kept interest rates on hold at 3.75% at its recent meeting. Although three out of nine policymakers favored raising rates by a quarter-point, the BOE said in its statement that there was no indication of second-round effects on inflation from elevated energy prices so far. This has caused investors to cut back their expectations of BOE rate rises later in 2026.
Markets currently price in a total of 30 basis points of BOE rate hikes this year, down from 37 basis points priced in prior to the meeting, LSEG data show.
On Tuesday, the BOE will publish its Asset Purchase Facility Quarterly Report, which outlines the bank's stock of gilt holdings and the changes from April 1 to June 30.
The U.K. will sell March 2032 gilts via auction on Tuesday.
Scandinavia
Denmark, Sweden and Norway will hold bond auctions on Wednesday.
Czech Republic
The Czech National Bank is widely expected to keep interest rates unchanged Thursday after raising rates by 25 basis points to 3.75% in June.
While the CNB still appears to be attentive to inflation risks, most board members don't seem to be in a hurry to tighten monetary conditions further, Goldman Sachs economists said in a note.
Recent comments and the minutes of the June meeting struck a cautious tone, presenting additional rate rises as probable but leaning toward a pause at the upcoming meeting until more data are received, they said.
June's inflation print came in lower than expected, reinforcing this patient approach. Inflation has remained relatively subdued in the face of the energy price shock due to weak prewar inflation momentum and a stable koruna, they said.
"[June's] hike most likely represented a one-time precautionary move--not the start of a hiking cycle--while the market is expecting the policy rate to be tightened further over the coming year, to between 4.25-4.50%."
Japan
The Bank of Japan on Wednesday is set to release the minutes of its policy-setting meeting in June, when it raised rates to a three-decade high of 1%, as the yen continues to face pressure despite speculation that government officials stepped in to prop up the weakening currency.
Auto sales figures for July and household spending data for June are also due on Monday and Friday, respectively.
The Ministry of Finance will hold government bond auctions during the week: It will sell about 2.6 trillion yen of 10-year JGBs on Tuesday and around 600 billion yen of 30-year sovereign debt on Thursday.
Prime Minister Sanae Takaichi has reportedly indicated that the reduction in the food consumption tax will be approved by the Cabinet during the week, the strategists added.
Australia / New Zealand
In Australia, the data calendar is light, as markets look ahead to a policy meeting by the Reserve Bank of Australia closer to the middle of August. Following news of tame second-quarter inflation numbers, more forecasters have abandoned calls for a further interest-rate rise in August, while few say they are relaxed about the outlook for price pressures given the recent rise in world oil prices.
In New Zealand, the second-quarter employment report on Thursday will be the highlight of an otherwise quiet week for the region.
The unemployment rate is expected to tick up to 5.4% in the quarter, highlighting the still fragile state of the economy that is otherwise battling elevated inflation and the threat of further interest-rate increases.
Still, the jobs data will likely confirm that the war in the Middle East hasn't hit the New Zealand economy too hard thus far. With employment not keeping pace with population growth, economists expect to see the unemployment rate rise over time, with wage growth remaining subdued.
China
Comments