The August 1 week has two high points: the July employment report on Friday, and the Treasury's quarterly refunding package on Wednesday.
There are a number of major central bank monetary policy announcements on the calendar, although the FOMC meeting is not until the following week so the coming week includes the traditional press blackout period for one week in advance of Committee discussions.
Elsewhere, the Reserve Bank of Australia will release its statement in the overnight hours of Monday-Tuesday. The Bank's policy is currently on hold.
The Bank of England's Monetary Policy Committee meets in a two-day session on Wednesday and Thursday but is not expected to change the current overnight rate of 0.50% or the level of assets purchased at GBP 200 billion.
The ECB Governing Council will release its decision on Thursday. It is possible there will be another hike to the current refi rate of 1.50%, most probably 25 basis points if the Bank opts to increase the rate.
The Bank of Japan's Policy Board meets on Thursday and Friday. No change is expected in the current highly accommodative policy.
The second quarter earnings season also continues with a large number of releases on the calendar. These will include a number of companies in the insurance industry and from utilities providers.
The report on the employment situation in July is due on Friday and may answer the question as to whether the slowing in economic activity was temporary or will persist as the summer progresses. After two months of quite disappointing numbers, payrolls are expected to show more substantial gains. However, these are still going to be consistent with subpar increases for this stage in a recovery. The unemployment rate probably will not reflect any fundamental improvement.
Labor market data in the days leading up to the employment report will include the ADP National Employment Report for July on Wednesday. The data did a good job signaling the size of the change in payrolls in May, but had a big miss in June. As a result, analysts will be cautious in taking the ADP report at face value.
The Challenger report on layoff intentions in July on Wednesday will probably take a turn higher. A few companies -- among them Goldman-Sachs, Credit Suisse, HSBC, Cisco and Lockheed Martin -- have made some big announcements this month. Government layoffs also continue as state and local authorities are still cutting budgets. However, some of these will be in the form of positions not filled and voluntary retirements, and some will happen over a period of months.
The Monster Worldwide Employment Index for July will be released in the early hours on Thursday morning. The index has made some steady gains for most of the last six months. The reading of 146 in June was the highest since 150 in October 2008, and index levels are moving above those that marked the trough of the recession. There is still a way to go before returning to pre-recession conditions.
Initial claims for the week ended July 30 on Thursday should show that levels remain somewhat elevated, but are starting to move lower. However, recent layoff announcements in some industries suggest that claims levels are going to remain high for some time yet.
The ISM indexes for manufacturing and non-manufacturing for July are due Monday and Wednesday. The performance for some of the regional surveys of factory activity in July sent mixed signals, but on balance it looks like manufacturing is starting to regain its footing. The available data for service sector revenues also suggest that non-manufacturing activity will start to look a bit firmer as the second half of 2011 starts off. Still, there is room for improvement in both sectors.
Factory orders for June on Thursday will...Read more
.jpg)
