#Ringthebell week 31: RBNZ Rate, Service PMI and GDP

What will happen during week 31, 2019? Everything Investors Will Be Watching in the Coming Week before the Bell rings

This coming week will come a few days after the Federal Reserve disappointed the market. In the monetary policy statement released on Wednesday, the Federal Reserve lowered interest rates for the first time since 2008 (we just talk about it).

While this was welcomed by the market, the disappointment came after the Fed said that the rate cut was part of the cyclical adjustment. In other words, it was not a start of a longer easing cycle.

The following will be the key things investors will be watching in the coming week.

Monday

On Monday, the market will receive the service PMI data from a number of countries. This data will be released by IHSMarkit, which is one of the leading data companies in the world.

  • Japan: investors will want to see the performance of the services sector. This is after the June PMI data came in at 51.9.
  • China: the services PMI was 52.0 in June while in Sweden, it was 49.9 in the month.
  • United Kingdom: investors expect the services PMI to increase from 50.2 to 51.
  • United States: investors expect the ISM non-manufacturing PMI for July to be at 55.5, which is much better than the previous 55.1. The ISM non-manufacturing business activity is expected to increase slightly from 58.2 to 58.3.

Economic Data, 6 key that matter to investors

Tuesday

On Tuesday, investors will receive the employment data from Australia. The unemployment rate is expected to remain unchanged at 4.2% while the participation rate is expected to increase slightly from 70.40% to 70.90%.

The labor cost index is expected to increase slightly from 2.0% to 2.1% while the employment change in the second quarter is expected to have increased by 0.5%. This data will come a few hours before the RBA is scheduled to leave interest rates unchanged at 1.0%.

In Japan, the household spending data is expected to have increased by 1.6% in June. This will be lower than the 4.0% gain in May. On a MoM basis, the household spending is expected to have increased by 1.2%.

In the United States, the JOLTS job openings data is expected to show a slight decline from 7.32 million in May to 7.268 million in June.

Wednesday

On Wednesday, the Reserve Bank of New Zealand (RBNZ) is expected to release its interest rates decision. Investors expect that the central bank will lower interest rates by 25 basis points from the current 1.50% to 1.25%.

New Zealand Stock Exchange

Moving to Europe, the German industrial production data is expected to increase slightly from 0.3% to 0.4%. In the UK, the Halifax house price index for July is expected to have risen slightly from -0.3% to -0.2%.

In India, the central bank is expected to lower interest rates from 5.50% to 5.25% while in Canada, the Ivey PMI is expected to increase slightly from 52.4 to 55.0.

Thursday

On Thursday, Japan will release its current account. This data is expected to show that the account declined from Y1.595 trillion in May to Y1.385 trillion in June.

In the EU, the European Commission will publish its economic bulletin, which is a document that details the economic situation of the region.

In South Africa, the mining department will release the gold production and mining production data while Mexico will release its wholesale trade data.

Friday

On Friday, Japan will release the preliminary GDP data for the second quarter. Investors expect the data to show that the economy contracted by -0.2% in the quarter. This will be lower than the first quarter’s growth of 2.2%. The GDP external demand is expected to have declined slightly from 0.4% to 0.3%.

In China, the headline CPI is expected to remain unchanged at 2.7% while in Switzerland, the unemployment rate is expected to have increased slightly from 2.3% to 2.4%. In Germany, the exports are expected to have declined slightly from 1.1% in May to 0.5% in June.

The UK preliminary GDP data for the second quarter is expected to show that the growth remained unchanged at 1.8% while the manufacturing production is expected to have increased by 2.1% in June.

In Canada, the country will release the employment data. The unemployment rate is expected to have remained unchanged at 5.5% while the employment change for July is expected to be at 10k.

Other useful resources

Economic bulletin – European Central Bank

Gross Domestic Product – Investopedia

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