Rate Cut Hopes on the Line: NFP Set to Steal the Spotlight!

Monday, 1 July 2024, 17:00 – US ISM Manufacturing PMI (Jun)

The US ISM Manufacturing PMI came in at 48.7 for May, below the forecast of 49.8 and the previous reading of 49.2. The main reasons for this stagnant reading are ongoing weak demand, which affects supplier orders, inventories, capital investments, and employment. Specific areas of concern include a significant drop in the Employment Index to 48.1, reflecting increased layoffs as companies adjust to lower demand. Given the current economic environment characterized by sluggish demand, persistent inflation, and labor market challenges, it is likely that the PMI will continue to hover around contraction territory (below 50).

Wednesday, 3 July 2024, 15:15 – US ADP Nonfarm Employment Change (Jun)

In May, ADP Nonfarm Employment Change have increased 152,000 jobs, which was below the forecast of 173,000 and down from the previous month’s 188,000. This slower job growth was influenced by significant declines in manufacturing and softer hiring in the leisure and hospitality sectors. The overall private labor market remains solid, but there are noticeable weaknesses tied to both producers and consumers. Therefore, expectations for the June report will likely be tempered by the recent trends.

Wednesday, 3 July 2024, 17:00 – US ISM Non-Manufacturing PMI (Jun)

The US ISM Non-Manufacturing PMI for May exceeded expectations, registering 53.8 compared to the forecasted 51.0, and notably up from the previous month’s 49.4. This suggests growth in the non-manufacturing sector, bolstered by increased business activity and new orders. Sectors like arts, entertainment, and recreation have experienced rising consumer demand contributing to this uptick. In the upcoming release, market expects that the PMI to remain above 50, signaling continued expansion.

Friday, 5 July 2024, 15:30 – U.S Nonfarm Payrolls (Jun)

The latest U.S. Non-Farm Payroll (NFP) data for May, revealed a notable increase of 272,000 jobs in May, surpassing both expectations of 182K and the average monthly gain of 232,000 over the past year. Significant growth was observed in sectors such as healthcare, government, leisure and hospitality, and professional, scientific, and technical services. Despite concerns about economic slowdown, the job market remained resilient, buoyed by robust employment gains in essential services and government roles. Given the strong performance in May, forecasts for the upcoming NFP report lean towards cautious optimism. However, as the ADP report serves as an early indicator for the Non-Farm Payrolls (NFP), the market is anticipated to await the ADP data release for initial signals.