Economic Calendar: Could Smaller Job Reports Pressure Fed to Hike?

Thursday's macroeconomic calendar remains relatively light, allowing markets to focus fully on the next round of corporate earnings reports on both sides of the Atlantic.

In Europe, following the release of robust German industrial orders, the only major data point ahead is Eurozone retail sales. Meanwhile in the US, the schedule features secondary labor market reports (the Challenger report, jobless claims) alongside the EIA natural gas storage report.

The market appears momentarily fatigued by the recent bout of volatility, though another round of very strong labor market data could re-ignite investor fears of swift US rate hikes.

Key Releases from the Asian Session & Morning

• Germany: Outstanding, highly surprising industrial orders data for June. On a monthly basis (m/m), orders surged by 3.1% against a modest market consensus of just 0.3% m/m. On a yearly basis (y/y), growth jumped to 6.5% (compared to 4.5% in the previous month), delivering a strong boost to the struggling German economy.

• Australia: June's foreign trade balance delivered a massive turnaround. The trade surplus came in at AUD 1.93 billion, completely defying analyst forecasts that expected a deficit of -AUD 1.1 billion (previous: -AUD 2.37 billion).

• USA: The overnight session was marked by remarks from San Francisco Fed President Mary Daly, who addressed the current interest rate trajectory and the condition of the labor market.

Macroeconomic Calendar

• 08:00 Germany - Industrial Orders s.a. (m/m) (June). Actual: 3.1% | Consensus: 0.3% | Previous: 0.3%

• 08:00 Germany - Industrial Orders w.d.a. (y/y) (June). Actual: 6.5% | Previous: 4.5%

• 11:00 Eurozone - Retail Sales s.a. (m/m) (June). Consensus: 0.1% | Previous: 0.2%

• 11:00 Eurozone - Retail Sales w.d.a. (y/y) (June). Consensus: 0.9% | Previous: 1.6%

• 11:30 USA - Challenger Job Cuts Report (July). Previous: 45.85k

• 14:30 USA - Nonfarm Productivity (q/q) (Q2 Flash). Consensus: 0.7% | Previous: 0.3%

• 14:30 USA - Unit Labor Costs (q/q) (Q2 Flash). Consensus: 2.1% | Previous: 1.8%

• 14:30 USA - Initial Jobless Claims. Consensus: 201k | Previous: 197k

• 16:00 USA - Wholesale Inventories (m/m) (June). Consensus: 0.3% | Previous: 0.1%

• 16:30 USA - EIA Natural Gas Storage Change. Consensus: 30 Bcf | Previous: 28 Bcf

• 23:30 USA - Speech by St. Louis Fed President Alberto Musalem

Top Earnings Releases

Wall Street:

• Eli Lilly (before market open) – key report for the pharma and healthcare sector; investors will focus on sales of weight-loss and diabetes drugs.

• ConocoPhillips (before market open) – indicator of the extraction sector's health amid crude oil price swings.

• Gilead Sciences (after market close)

Euronext:

• Deutsche Telekom

• Siemens

3 Markets to Watch Today

• DE40 / DAX (Equity Index) – The German index received a shot of optimism right before the market open thanks to a very strong industrial orders reading (3.1% m/m vs. 0.3% expected). Industrial stock demand could dominate trading on the Frankfurt floor today, with Eurozone retail sales data at 11:00 completing the European macroeconomic picture.

• EURUSD (FX) – The major currency pair could see increased activity even with secondary US labor market reports. Following yesterday's much-stronger-than-expected ADP reading, further hawkish labor market signals (e.g., jobless claims remaining below 200k) could once again boost expectations for US rate hikes.

• Natural Gas / NATGAS (Commodities) – Natural gas prices will take center stage at 16:30 following the release of the weekly EIA report on US storage changes (consensus: 30 Bcf). Combined with a summer heatwave across the US and rising demand from the power sector, any deviation from expectations could trigger a sharp spike in commodity price volatility.