Quiet Before the Storm? Markets Poised for a Relaxed Week

Tuesday, 20 August 2024, 14:30 – Canada CPI (YoY) (Jul)

For June 2024, Canada’s CPI rose by 2.7% year-over-year, down from 2.9% previously. This decrease in core inflation is driven by a combination of slower economic growth and moderated wage growth, even with a strong labor market. With the current monetary policy and expectations of slowing growth, the upcoming data release is expected to reflect ongoing slowdown with a slight decline.

Wednesday, 21 August 2024, 20:00 – FOMC Meeting Minutes

The FOMC meeting minutes from July 2024 indicated that the Federal Reserve decided to maintain the federal funds rate within the target range of 5.25% to 5.50% and revealed a shift in the Fed’s focus. Previously, the emphasis was primarily on managing inflation risks. However, the latest statement reflects a more balanced view, considering both inflation and employment, which aligns with the Fed’s dual mandate. The upcoming release will likely reiterate on Fed cautious stance and focus on evaluating new economic data to determine whether further adjustments to the monetary policy are necessary.

Thursday, 22 August 2024, 14:30 – US Initial Jobless Claims

The latest U.S. Initial Jobless Claims data, released on August 15, 2024, indicates that claims fell to 227,000 for the week ending August 10, down from 243,000 the previous week. This decline points to some stabilization in the labor market, despite broader economic uncertainties. Layoffs remain historically low, with much of the slowdown in the labor market coming from businesses scaling back hiring, trailing an immigration-induced surge in labor supply. Following current conditions, the upcoming data is expected to remain within a similar range unless significant disruption occurs.

Thursday, 22 August 2024, 15:45 – US Manufacturing PMI (Aug)

For July, The U.S. Manufacturing Purchasing Managers Index (PMI) for July 2024 was reported at 49.6, indicating a contraction in the manufacturing sector as it fell below the 50 mark. This was a decline from the previous month’s reading of 51.6, signaling a worsening trend in manufacturing activity. The primary factors behind this decline include a reduction in new orders and production, as well as continued uncertainty in the economic environment. Survey respondents highlighted weaker consumer spending and reduced customer orders, which have been contributing to the sector’s sluggish performance The upcoming PMI is likely to remain under pressure as manufacturing sector may not see significant recovery until after the election cycle, as businesses await clearer signals on economic policy