AUSTRALIA

The AI GROUP will release this week its performance index on services, manufacturing and construction.

Data for previous month signaled a significant pullback of the manufacturing index to the expansion zone above 50 at 51.5 in june from 41.6 in May. However, services and construction sectors are still contracting but at a slower pace.

Another major event is the reserve Bank of Australia monetary policy decision. Generally, no changes are expected from the RBA, unless some emphasise on uncertainty about the pace of economic recovery and concerns over the rising numbers of COVID-19 infections in Australia and around the globe.

The RBA is expected to continue targeting three years bond yield at 0,25% and is ready (as expressed before) to buy government bonds to reach its target.

CHINA

This week MARKIT will release Caixin Manufacturing and services PMIs, they are broadly expected to continue their expansion as anticipated in the previous week by the Chinese CFLP PMI data.

UNITED STATES

The Institute of Supply and Management will be releasing the ISM manufacturing PMI for July on monday, and the non manufacturing PMI on wednesday.

The ISM PMI data for june marked a strong positive rebound to expansion territory above 50, where the NMI increased by 11.7 points in one month to 57.10 from 45.40 in May. Also the manufacturing PMI increased by 9.5 points in June, to 52.6 from 43.1 in may.

The market is expecting a continuous expansion in the manufacturing PMI, to come near 53.6, and the non-manufacturing PMI to slow down to 55.0 from 57.10 in june.

The divergence in the two indicators direction will add on the uncertainty about the pace of recovery in the U.S economy, especially after the decrease in U.S consumer sentiment, and the less than previously anticipated jobs creation level that will be released in the NFP Report later this week.

EURO AREA

In the eurozone, no major changes are expected in markit final PMI data, both manufacturing and services PMIs have passed to the expansion zone, to better than pre-pandemic levels.

In addition, on tuesday, the European Commision will be releasing the producer price index for the euro area for the month of june.

PPI is experiencing a long term negative downtrend on a year over year basis, but this time we expect some retracement to the upside. the strong rapid pull back in commodity prices, especially oil, copper and precious metals will be supportive to the PPI and other inflation metrics from now on.