Preview of next week’s major events and indicators

List of important economic data

Keywords for Monday, June 28: Opening situation, Fed Williams’ speech

To be determined, the European Union releases its summer economic forecast.

21:00 FOMC permanent voting committee member and New York Fed Chairman Williams appeared in the Bank for International Settlements expert panel discussion.

23:00 European Central Bank Vice President Guindos delivered a speech.

During the European session, market economic data are scarce, and market fluctuations are expected to be very limited.

Keywords for Tuesday, June 29: Eurozone Economic Sentiment Index, German June CPI, American Conference Board Consumer Confidence

21:00 2021 FOMC Voting Committee, Richmond Barkin, Chairman of the Federal Reserve Bank, delivered a speech.

The European Central Bank decided on the 10th to maintain its leading interest rates and bond purchase plan unchanged, and raised its economic growth and inflation expectations for the euro zone this year and next, but believed that the medium-term inflation outlook has not changed. On the same day, the European Central Bank raised its economic growth forecast for the Eurozone this year to 4.6% from the 4% forecast in March, and raised its economic growth forecast for next year from 4.1% to 4.7%. The European Central Bank also predicts that the inflation rates in the euro area will be 1.9% and 1.5% respectively this year and next, which are 0.4 and 0.3 percentage points higher than the March forecast; the core inflation rates will be 1.1% and 1.3% respectively. The European Central Bank said that the inflation rate in the euro area has increased in recent months, mainly due to low base effects, short-term factors and rising energy prices. Inflation levels are expected to rise further in the second half of this year, and then subside as temporary factors And decline.

The reason there is such a huge difference between perceived and official inflation rates is that when calculating the former, economic experts heavily weight some goods and services based on how often consumers buy them. . The weight of fuel accounts for about 10%, which is almost three times that of the German Federal Statistical Office. One of the main reasons for the recent rapid rise in inflation is also the soaring fuel prices.

Analysts indicate that fuel prices rose by 27% in May this year compared with the same month last year. Oil prices, which had plummeted this time last year due to the economic recession caused by the epidemic, have risen again as the global economy recovers. Furthermore, we are now out of lockdown and people are more mobile again, refueling more frequently. This means that people are also more sensitive to rising oil prices. A representative survey also showed that 66% of consumers believe that this round of inflation is related to oil prices.

The analysis also predicts that prices of German goods and services will continue to rise in the coming months. Now that restaurants and hotels are reopening, shop owners are likely to raise prices, especially in anticipation of strong demand. This inference also applies to other industries.

Analysts pointed out that the U.S. economy is expected to experience stronger growth, and the number of consumers who are expected to see a net decrease in the unemployment rate has reached a record high. Although inflation expectations declined in early June, rising inflation remains a top concern for consumers. The analysis pointed out that the sharp rise in the consumer expectations index provided impetus. U.S. consumer sentiment rose more than expected in early June as the economic outlook improved and inflation expectations softened. Additionally, consumer sentiment is more optimistic as travel restrictions are lifted, temperatures warm and health concerns recede.

As for the recent record-high inflation in the United States, some market participants have pointed out that this is not the "temporary" inflation described by the Federal Reserve. Michelle Meyer, chief economist at Bank of America, pointed out that as labor shortages and signs of inflation continue to emerge, the confidence of the Federal Reserve and the market is becoming increasingly unconvincing, and the foundation for more sustained inflation in the future is starting to lay the foundation from now on.

Keywords for Wednesday, June 30: China’s official manufacturing PMI, UK first quarter GDP, German employment data, US ADP employment, Canada April GDP, US EIA inventories

At present, China's national economy continues to improve. A survey results predict that the economic growth rate in the second quarter of 2021 will be around 12.2%, and the full-year economic growth rate is expected to reach 9.4%. Analysis shows that the economic growth rate in the second quarter will increase year-on-year, due to low base factors. Major economic indicators such as industry, investment, and foreign trade are also improving, and the balance and endogenous kinetic energy of economic recovery tend to increase. By the middle of the year, many institutions had released economic forecast reports. Data show that nearly 10 market research institutions have an average forecast of GDP growth in the second quarter of this year of 8.6%, with the maximum value being 12% and the minimum value being 7.6%.

The Organization for Economic Cooperation and Development recently released its latest World Economic Outlook report, predicting that China’s economy will grow by 8.5% this year, an increase of 0.7 percentage points from the 7.8% forecast in March this year, which is much higher than the global Economic growth expectations highlight the OECD's strong confidence in China's economic growth.

The OECD stated that thanks to China's effective control of the COVID-19 epidemic and the accelerated opening up of many industries, China surpassed the United States to become the world's largest foreign investment inflow country in 2020. China's good economic development prospects and further opening up posture and measures will help China continue to attract foreign investment inflows. . Moreover, China still has a lot of room for improvement in attracting foreign investment. "Stabilizing foreign investment" is still an important policy goal of the Chinese government. In traditional industries and manufacturing and other fields, the introduction of foreign investment will help to upgrade technology, improve organization and management, and improve organizational management. Improve efficiency.

The latest "Global Economic Outlook" released by the World Bank on June 8 stated that China's recovery has expanded from public investment to consumption. Due to active exports, the epidemic was effectively controlled after Pent-up demand has been released, and China's growth is expected to accelerate to 8.5% this year.

Regarding the British economy, the Bank of England pointed out in its latest report that with the lifting of COVID-19 restrictions, the British economy will achieve the fastest growth in more than 70 years in 2021. The Bank of England announced that the government's additional spending on anti-epidemic funds will help increase employment opportunities, and the economy is expected to expand by 7.25% this year.

British economic professionals expect the pace of economic recovery to accelerate as busy streets reopen, paving the way for a small spending boom. The rapid rollout of vaccines in the UK has also given a strong boost to consumer confidence. The British Monetary Policy Committee recently emphasized that it will continue to implement a low interest rate policy and will not raise interest rates until there is "clear evidence" that the economic recovery is sustainable.

About employment in Germany. After a long epidemic crisis, the German job market is finally showing signs of recovery. Data show that in May this year, Germany's unemployment rate dropped to 5.9%, and the total number of unemployed people was 2.7 million, 84,000 less than in April and 126,000 less than the same period last year. Schiller, director of the German Federal Labor Office, said this was the first sign of a full recovery in the labor market. Although the situation is slowly improving, the impact of the epidemic crisis remains far-reaching.

Investors are betting that interest rates will climb above previous peaks for the first time in decades during the Bank of Canada's next tightening cycle, driven by a surge in government spending and a glut of cash savings among households. . The Bank of Canada's key interest rate has peaked below its previous level. But that may change in the next cycle, as government spending around the world is hitting record highs, making prospects for economic recovery from the epidemic more optimistic.

To stimulate the economy, the Canadian government will spend 101 billion yuan over three years, accounting for about 5% of GDP; while US President Biden has proposed a multi-trillion-dollar infrastructure spending plan. A higher peak interest rate increase may give the Bank of Canada more strength to deal with the next economic downturn, and may also stimulate structural changes in the economy and promote savings and investment instead of borrowing.

The Bank of Canada has hinted that it may start raising interest rates from the historical low of 0.25% in the second half of next year, which is much earlier than the 2023 rate hike predicted by the Federal Reserve.

Keywords for Thursday, July 1: China Caixin Manufacturing PMI, France, Germany, UK manufacturing PMI data, US initial jobless claims data, US ISM manufacturing PMI

< p> The Hong Kong Stock Exchange will be closed for one day on the anniversary of Hong Kong's return to the motherland.

On Canada Day, the market will be closed for one day.

To be determined The Ministerial Supervision Committee of OPEC and non-OPEC oil-producing countries holds a meeting.

The current performance of the U.S. manufacturing industry is gradually improving. Despite this, manufacturers are still struggling to obtain raw materials and recruit qualified workers, which has greatly increased prices for companies and consumers. Strong performance in manufacturing supported economists' expectations for double-digit growth in the second quarter. As the coronavirus pandemic keeps Americans at home, demand shifts from services to goods. Demand remains strong as vaccinations and trillions of dollars in government relief funds allow the economy to reopen more broadly.

Analysts said that the U.S. economy further achieved impressive growth in June. While output growth and new order inflows in both manufacturing and services are off their peak, this is largely due to capacity constraints rather than a cooling economy that limits companies' ability to respond to demand. Although price indicators have also declined from May's historical highs, it is clear that the economy continues to run hot.

Keywords for Friday, July 2nd: U.S. non-farm payrolls report in June

During the European session, investors paid a little attention to the May PPI of the euro zone, but after the release of important data Currently, market fluctuations are expected to be relatively limited.

During the New York session, the market ushered in the most important economic data that will affect this week’s market trends, the U.S. non-farm payrolls report in June. The quality of the data will directly and significantly affect the direction of the market.

Although the U.S. job market is recovering, the extent of the recovery is still less than market expectations. A year ago at this time, the U.S. employment population was plummeting as the government continued to force businesses to close to contain the pandemic. Employment has continued to improve as vaccinations have progressed and cases, hospitalizations and deaths have fallen sharply.

Analysts say the rapid tightening of the labor market may cause a medium-term problem for financial markets. Although new jobs are increasing, the U.S. unemployment rate continues to rise and the employment rate is sluggish. Many businesses have also publicly decried labor shortages, citing childcare issues, ongoing concerns about the pandemic and increased unemployment benefits from government stimulus packages. The labor shortage has forced some companies to raise wages and offer more attractive bonuses and prompted some state officials to announce an early end to enhanced unemployment benefits.

The Federal Reserve has recently raised its inflation expectations and brought forward its timetable for raising interest rates. It now expects two rate hikes in 2023, as U.S. inflation is at a multi-decade high.

According to analysis, the Fed seems to be quite resolute in adhering to this line, being more easing than ever before and maintaining liquidity as much as possible, but the speed of withdrawing liquidity is very, very slow. Analysts believe that given existing valuation indicators, any disruption to financial markets, including the labor market, is a real problem facing financial markets in the medium term.

In addition to the U.S. non-farm payrolls report, investors should pay close attention to other U.S. data, including the U.S. trade balance, durable goods orders and factory orders.

July 3rd - July 4th, Saturday and Sunday: No major news events

This article comes from Huitong.com