US Economic Data: Key reports including PMI, JOLTS, ADP Non-Farm Employment and the pivotal Non-Farm Payrolls (NFP), with significant implications for economic growth and labor market health.
Canadian Labor Market Data: Employment Change and Unemployment Rate figures will provide crucial insights into the Canadian labor market, influencing CAD movements.
European Inflation and Economic Activity: Core CPI Flash Estimate and German Prelim CPI m/m will highlight inflation trends, while ECB President Lagarde’s speeches will offer guidance on future monetary policy.
Market Movements: In-depth analysis of the US Dollar Index and Dow Jones Industrial Average, highlighting potential trends and investor strategies.
Welcome to another insightful edition of the Errante Weekly Newsletter. As we move into the first week of July, key economic events and market movements are poised to shape the financial landscape. Here’s what you need to know.
Now What?
Upcoming US Economic Data:
Investors are keenly awaiting crucial US economic data, including the PMI reports for manufacturing and services sectors, and the JOLTS Job Openings on Tuesday. Additionally, the ADP Non-Farm Employment Change and Unemployment Claims data on Wednesday will provide insights into the health of the US labor market.
The highly anticipated Non-Farm Payrolls (NFP) report on Friday will be pivotal, offering a comprehensive view of employment trends and potentially driving significant market movements. Given the mixed performance of the Final Manufacturing PMI in past announcements, there is a possibility of market volatility based on these results.
FOMC Meeting Minutes:
The release of the FOMC meeting minutes on Wednesday evening will be closely watched for any indications of future interest rate movements. The market is eager to gauge the Fed’s stance on monetary policy, particularly in the context of ongoing inflationary pressures and labor market conditions.
Canadian Labor Market Data:
Canada’s Employment Change and Unemployment Rate figures, scheduled for release on Friday, will be crucial in assessing the health of the Canadian labor market. Strong data could bolster the CAD, while weaker figures might weigh on the currency.
European Inflation and Central Bank Decisions:
In Europe, the Core CPI Flash Estimate is forecasted to rise to 2.9% on Tuesday, maintaining the narrative of persistent inflation. ECB President Lagarde’s speeches throughout the week will be crucial in understanding the ECB’s approach to tackling inflation and its impact on EUR pairs. Additionally, the German Prelim CPI m/m will provide further insights into inflation trends in the Eurozone’s largest economy.
Market Events and Announcements
The times below are GMT +3.
Monday, July 1, 2024:
08:35 AM – AUD Retail Sales m/m
All Day – EUR German Prelim CPI m/m
04:45 PM – USD Final Manufacturing PMI
05:00 PM – USD ISM Manufacturing PMI
05:00 PM – USD ISM Manufacturing Prices
10:00 PM – EUR ECB President Lagarde Speaks
Tuesday, July 2, 2024:
04:30 AM – AUD Monetary Policy Meeting Minutes
12:00 PM – EUR Core CPI Flash Estimate y/y
12:00 PM – EUR CPI Flash Estimate y/y
04:30 PM – EUR ECB President Lagarde Speaks
05:00 PM – USD Fed Chair Powell Speaks
05:00 PM – USD JOLTS Job Openings
Wednesday, July 3, 2024:
03:15 PM – USD ADP Non-Farm Employment Change
03:30 PM – USD Unemployment Claims
04:45 PM – USD Final Services PMI
05:00 PM – USD ISM Services PMI
05:15 PM – EUR ECB President Lagarde Speaks
09:00 PM – USD FOMC Meeting Minutes
Thursday, July 4, 2024:
09:30 AM – CHF CPI m/m
All Day – GBP Parliamentary Elections
11:30 AM – GBP Construction PMI
Friday, July 5, 2024:
03:30 PM – CAD Employment Change
03:30 PM – CAD Unemployment Rate
03:30 PM – USD Average Hourly Earnings m/m
03:30 PM – USD Non-Farm Employment Change
03:30 PM – USD Unemployment Rate
05:00 PM – CAD Ivey PMI
08:15 PM – EUR ECB President Lagarde Speaks
Market Insights: Key Charts to Watch
DXA (US Dollar Index) Daily Chart:
The US Dollar Index (DXA) exhibits a bullish outlook, supported by strong US economic data and a hawkish Federal Reserve. The index remains above the critical level of 105.540, above both the 100-day and 34-day moving averages and sustained by a six-month uptrend line.
Impact of Upcoming Events:
The degree of NFP surprise (the difference between actual and forecasted figures) plays a crucial role. Larger surprises lead to greater volatility in the USD Index. For example, when the NFP surprise is outside the range of +35K to -55K jobs, the USD Index’s daily trading range exceeds its 20-day average trading range (ATR) 69% of the time. Better than expected economic data and strong employment data could reinforce the bullish momentum, while weaker data might introduce volatility.
Key Levels:
Bullish Target: Solidifying above 105.687, targeting 105.874 and 106.080.
Bearish Risk: If the index falls below 105.540, watch for support at 105.334. The uptrend remains valid as long as the index stays above 105.
US30 (Dow Jones Industrial Average) Daily Chart:
The Dow Jones Industrial Average (US30) has maintained its bullish tone after rebounding from the low at 38986.65, above the 34-day moving average.
Impact of Upcoming Events:
The series of US economic reports, especially the PMI data and Non-Farm Payrolls (NFP), will be crucial in determining the market sentiment for US equities.
Recent economic data, such as employment numbers and consumer spending, has been favorable. This supports the expectation of continued growth in the stock market. The performance of key sectors within the Dow, such as technology and industrials, has been strong. These sectors have a significant impact on the overall index. Investor sentiment and market momentum are also positive. This is reflected in the steady buying pressure and reduced volatility. Positive data could sustain the bullish trend, while disappointing numbers might trigger a correction.
Key Levels:
Bullish Target: Breaching 39405.87 could lead to further gains towards 39665.00, with potential targets at 39849.51 and 40084.20.
Bearish Risk: Defending the resistance at 39405.87 could push the index back to 38986.65. A break below this support exposes the next level at 38796.50.
Errante’s Weekly Newsletter brings you critical market insights to keep you ahead in the financial world. Stay informed and make strategic decisions with Errante.
If you have any questions or require any assistance, please contact one of our support team members via our Live Chat or email [email protected].
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