Investors will be impatiently waiting for the result of the meeting of US and Chinese presidents during the summit of leaders of the G20 countries in Osaka. The result of this meeting may be to alleviate the trade conflict and to get closer to signing a trade agreement or, on the contrary, escalating the trade conflict.
On Sunday night, we will see the first reaction of markets as soon as the trade starts in New Zealand. Lack of agreement may lead to deterioration of sentiment in the markets, which may increase risk aversion. Then we can also observe a stronger reaction to futures contracts on US stock indices, Japanese yen or gold market. Lack of agreement may also increase the chances for more aggressive interest rate cuts by the Federal Reserve. Meanwhile, opening the way to sign a trade agreement would be a very positive signal for the economy, and then the sentiment in the market could improve.
During the week, very important data from the US economy will be published, including non-farm payrolls (NFP). An ISM reading will appear, which is dangerously close to the 50 points barrier. Also the result of US data will be able to strongly influence the expectations of the level of interest rates in the United States in the near future, as well as the US dollar, which has recently been under pressure. The manufacturing PMI for the US will be published on Monday, July 1 at 15:45 and the manufacturing ISM at 16.00.
At the beginning of the week it is also worth paying attention to the decision of the Reserve Bank of Australia (RBA). July 2 at 6:30 the decision on interest rates and a statement for decision will be published. Recent statements of the Governor of the RBA indicated that there is little chance for the RBA to continue to cut interest rates, hence the Australian dollar has gained in value in recent days.
On July 3, in the United States, the stock market session will be shortened due to the fact that on 4th July Americans will celebrate Independence Day. In turn, one day later, on July 5, key data from the US labor market will be published. We are talking about the change in employment, the unemployment rate and the average hourly earnings. The data will be published at 14:30.
There are many indications that the beginning of July may be hot not only in the weather, but also in financial markets, where it is worth paying attention to futures contracts for US stock indices, dollar, gold and crude oil due to the meeting of leaders of OPEC countries. They will decide on the production output for the remainder of the year.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal Opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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