Investing.com - The coming week will be dominated by several market-moving events, with the Federal Reserve's monetary policy meeting, July's jobs report and earnings from tech bellwether Apple on the agenda.
Markets are also keeping an eye on Europe amid widespread speculation the Bank of England will finally raise interest rates above their emergency levels set more than nine years ago.
Elsewhere, in Asia, the Bank of Japan's policy meeting is expected to be a focus point for investors, following chatter it could soon start scaling back its massive monetary stimulus.
Meantime, investors will be keeping abreast of the ongoing trade spat between the U.S. and major economies, such as China and the European Union, to see if any more news materializes.
$16 billion in U.S. tariffs on Chinese goods are expected to be implemented on Wednesday, with China expected to put tariffs on the same amount of U.S. goods in return.
At the same time, concerns over a transatlantic trade war eased somewhat following a positive meeting last week between President Donald Trump and European Commission President Jean-Claude Juncker.
The Trump administration was also making progress with Mexico toward a revision of the North American Free Trade Agreement (NAFTA).
Trade-war fears have been simmering for months, keeping market gains in check with investors jittery over the prospects of further escalation in tensions having an impact on global economic growth.
Ahead of the coming week, Investing.com has compiled a list of the five biggest events on the economic calendar that are most likely to affect the markets.
1. Federal Reserve Rate Decision
The Federal Reserve is not expected to take action on interest rates at the conclusion of its two-day policy meeting at 2:00PM ET on Wednesday, keeping it in a range between 1.75%-2.0%.
The central bank will release its post-meeting statement as investors look for any clues on whether it will follow through with rate hikes in September and again in December.
The Fed has forecast it will raise rates two more times in 2018, having already tightened policy twice this year.
Fed Chairman Jerome Powell said recently that the case for continued gradual rate hikes remains strong, signaling that borrowing costs will continue to climb this year despite the recent market volatility caused by the ongoing trade dispute between the U.S. and China.
Traders are currently pricing in around a 90% chance of a third rate hike in September, according to Investing.com’s Fed Rate Monitor Tool. Odds of a fourth rate hike by December was seen at about 70%.
2. U.S. Jobs Report
There's a gusher of economic reports in the coming week, as the calendar rolls to August from July, with the monthly employment data in the spotlight.
The U.S. Labor Department will release the nonfarm payrolls report for July at 8:30AM ET on Friday, and it will be watched more for what it says about wages than hiring.
The consensus forecast is that the data will show jobs growth of 190,000, after adding 213,000 positions in June, while the unemployment rate is seen inching down to 3.9% from 4.0%.
However, most of the focus will likely be on average hourly earnings figures, which are expected to rise 0.3%, a tad faster than the 0.2% increase a month earlier. On an annualized basis, wages are forecast to increase 2.8%, the same gain reported in June.
This week's economic calendar also features reports on personal income and spending, which includes the personal consumption expenditures (PCE) inflation data, the Fed's preferred metric for inflation.
Top-tier data on CB consumer confidence, ADP private sector payrolls, car sales, trade figures, construction spending and the ISM surveys on manufacturing and service sector activity will also be on the agenda.
3. Apple Highlights Another Busy Week Of Earnings
About a quarter of S&P 500 companies report in what will be the last big week for second-quarter earnings.
Apple (NASDAQ:AAPL) will get the most attention when it reports Tuesday after the closing bell. The iPhone-maker follows a string of tech earnings that have been largely positive, with the glaring exceptions of Netflix (NASDAQ:NFLX), Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR), which all suffered massive sell-offs after disappointing forecasts.
Some of other high-profile tech names reporting this week are Caterpillar (NYSE:CAT), Loews (NYSE:L), AK Steel (NYSE:AKS), Procter & Gamble (NYSE:PG), Pfizer (NYSE:PFE), Baidu (NASDAQ:BIDU), Sprint (NYSE:S), Tesla (NASDAQ:TSLA), Square (NYSE:SQ), Wynn Resorts (NASDAQ:WYNN), Teva (NYSE:TEVA), DowDuPont (NYSE:DWDP), Shake Shack (NYSE:SHAK), and Kraft Heinz (NASDAQ:KHC).
4. Bank of England Rate Announcement
The Bank of England (BoE) will announce its rate decision at 1200GMT (8:00AM ET) on Thursday. If all goes as scripted, the British central bank will nudge rates up to 0.75%, going beyond last November's increase back up to 0.5%.
It would be symbolic as it would get BoE rates above the emergency lows of the 2007-2008 global financial meltdown for the first time, but with a potentially messy Brexit nearing, Governor Mark Carney may sound cautious about further moves.
Markets are not pricing in another hike for at least a year.
Besides the BoE, traders will focus on a trio of reports on activity in the manufacturing, construction and services sectors for further indications on the continued effect that the Brexit decision is having on the economy.
The terms of Britain's future relationship with the European Union are still unclear, eight months before Brexit, and Prime Minister Theresa May could yet be unseated by her own Conservative Party which is split on how close the country should remain to the bloc.
5. Bank Of Japan Policy Meeting
The Bank of Japan (BoJ) is widely expected to start preparing markets for some changes to its unique, ultra-loose monetary policy at the conclusion of its two-day meeting on Tuesday.
Media reports last week indicated that the BoJ is now considering adjusting its massive stimulus program to make it more sustainable, such as allowing greater swings in interest rates and widening its stock-buying selection.
The changes, although small, would be the first since 2016 and the latest sign Governor Haruhiko Kuroda is gradually walking away from his radical stimulus program deployed five years ago to shock the public out of a sticky deflationary mindset.
After half a decade of heavy money printing failed to fire up inflation, the BoJ is under pressure to address the rising cost of prolonged easing, such as the hit to bank profits from near-zero rates, which would require raising rates.
Stay up-to-date on all of this week's economic events by visiting: http://www.investing.com/economic-calendar/