(MENAFN– ecpulse) The upcoming week will be light on economic data, by will feature minutes of the latest Federal Open Market Committee meeting, which will be scrutinized much more than usual.
With few major economic reports next week, the minutes from the Fed’s June 19 policy meeting will probably be the best guide to future US policy.
Federal Reserve Chair Ben Bernanke at his press conference after June’s policy meeting appeared to paint a slightly more hawkish picture of the policy outlook than markets had understood up to that point, saying the taper in asset purchases could come this year if the economy recovers as expected.
However, a range of FOMC members came out after the meeting saying that the markets misinterpreted or over-interpreted the Chairman’s comments.
The minutes, which will be released Wednesday at 2:00 p.m. ET, could provide a clearer picture of how exactly the committee will adjust policy in the coming months.
Bernanke himself will also have the chance to clarify, but he is unlikely to do so in a speech Wednesday at 4:10 p.m. ET to the NBER in Boston. The topic is a century of central banking
Economic Data (heading 1)
About 195,000 jobs were added in the month, above expectations for 165,000. There were also positive revisions to previous months, though the unemployment rate ticked up to 7.6 percent from 7.5 percent. Labor Department data showed last Friday.
Investors appear to have gladly received such a solid growth in the labor market, but it is still unclear whether investors thought of the jobs figures so strong that it would hasten the end of Federal Reserve quantitative easing program.
Investors will continue to weigh up the implications of Friday’s strong US jobs report on the future of the Federal Reserve’s QE stimulus scheme. Statements from the European Central Bank and Bank of England last week, suggesting that interest rates will remain at rock-bottom, will also remain at the front of investors’ minds.
The June producer price index, to be released Friday at 8:30 a.m. ET, is expected to show another bump off rising energy prices, though core prices are expected to remain muted.
Weekly initial jobless claims, to be released as usual Thursday at 8:30 a.m. ET, are expected to remain steady around 340,000. May JOLTs job openings will be released Tuesday at 10:00 a.m. ET.
Other data to be released over the week include May consumer credit Monday at 3:00 p.m. ET; the Mortgage Bankers Association`s mortgage applications index Wednesday at 7:00 a.m. ET; May wholesale inventories Wednesday at 10:00 a.m. ET; the May Treasury budget statement Thursday at 2:00 p.m. ET; and the University of Michigan`s preliminary July consumer sentiment index Friday at 9:55 a.m. ET.
Overseas ( Here also, Heading 1)
European Central Bank chief Mario Draghi speaks on Monday before a hearing of the European Parliament’s ECON committee.
At the same time, questions over the ongoing success of reforms in Portugal and Greece, necessary for bailout packages, could exercise finance ministers’ minds at a Eurogroup meeting. A question mark over Greece`s next aid tranche should however have been removed by Monday amid talks with international lenders.
The economic data highlight will be May German industrial production figures, to be released on Monday (followed by the reading for the whole euro area on Friday). Investors are expecting a decline after three large consecutive monthly increases.
A shower of economic updates from China will grab global market attention in the coming week, as investors try to gauge whether the leaders of the world’s second largest economy can engineer a steady slow-down.
The week’s data releases from China, covering inflation (Tuesday), trade (Wednesday) and money supply and lending will be particularly scrutinized after the country’s credit squeeze last month.
The intentions of China’s central bankers – or at least the authorities that direct them – may also become clearer, particularly when Chinese industrial production and second quarter GDP numbers are added to the next week’s data.
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