Economic Calendar

Monday, 5 August

15:00 BST

Following a rather poor ISM manufacturing PMI last week, which triggered recession alarm bells and a drop in stocks and bond yields, the focus will now turn to the largest sector of the economy with the release of the services PMI. This is expected to rebound back into expansion (at 51.3) following a surprise drop into contraction last month (48.8). That drop was driven by a slump in business activity, contracting for first time since May 2020, while new orders also contracted. With the Fed growing more concerned about employment, it is worth keeping an eye on the employment component of the latest ISM Services PMI as well as the headline reading.

What to watch: Gold, USD

Tuesday, 6 August

05:30 BST

Let's make this clear: The RBA doesn't seem to have a tough choice ahead. Their latest quarterly inflation figures were lower than anticipated, which might prompt them to ease off their hawkish stance in their policy statement. Sure, inflation is still higher than desired, but this data might be enough to shift their tone. Even if they don't, traders likely won't take their hawkish signals seriously. Considering the Fed's dovish stance and the RBNZ's shift away from a hawkish approach, there's little reason to expect a rate hike, especially with growth indicators weakening, despite overall strong employment numbers..

What to watch: AUD/USD, Australia 200

Friday, 9 August

13:30 BST

Last month’s surprise drop in employment hurt the Canadian dollar, which suffered further blows from a sell-off in crude oil and a general risk-off tone across financial markets last week. The Bank of Canada has already started to ease its policy, cutting the benchmark overnight rate twice now by 25 basis points at its past two meetings. At 4.50%, Canada’s base rate is lower than the US and UK, which explains why the USD/CAD has been on the rise. Should Canadian data weaken further then the CAD/JPY might be a more interesting pair to watch given the yen’s big upsurge amid a refreshingly hawkish Bank of Japan.

What to watch: USD/CAD, CAD/JPY