Three markets to watch next week (01.07.2022)

4:06 PM July 1, 2022

Global markets remain under pressure from fears of recession. Indices continue to move lower with any jumps being rather short-lived. A pack of new data on the economy will be offered to markets next week, including FOMC minutes and NFP report. Will those reports help soothe investors' nerves or will they add fuel to the fire? Be sure to watch US500, EURUSD and AUDCAD next week.


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Global stock markets underperformed this week amid rising risk of economic recession. One argument against the US recession is that the labor market remains strong. This will be put to a test this Friday, 1:30 pm BST with the release of the US NFP report for June. Market expects a 290k jobs gain, what would be the smallest increase this year. An underperforming jobs market would add to concerns and may pressure equities. However, it may also lead to slow down or even pause in rate hikes.


The Federal Reserve is in the midst of a rate hike cycle while ECB announced that it will start increasing rates at the next meeting. Both central banks will release minutes from its last meetings net  week. FOMC release (Wednesday, 7:00 pm BST) will show reasoning behind 75 basis point rate hike and whether a similarly big move is likely in July. EUR traders will look for hints on the pace of incoming tightening in ECB document (Thursday, 12:30 pm BST). 


Apart from the US jobs report, investors will also get a jobs report from Canada (Friday, 1:30 pm BST). Bank of Canada has been hiking rates alongside Fed and continued strength in the jobs market may help it stay on a tightening course. Speaking of central banks, RBA will announce policy decision on Tuesday, 5:30 am BST. A 50 basis point rate hike to 1.35% is expected. Both Canadian jobs report and RBA decision are expected to boost volatility on AUDCAD.


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