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The week ahead: 5 things to watch on the economic calendar

Published 27/08/2017, 06:04 pm
Updated 27/08/2017, 06:17 pm
© Reuters.  5 things to watch on the economic calendar in the week ahead

© Reuters. 5 things to watch on the economic calendar in the week ahead

Investing.com - Global financial markets will focus on this week's U.S. employment report to gauge how it will impact the Federal Reserve's view on monetary policy through the end of the year.

In addition, market players will keep an eye out on a revised reading of second-quarter U.S. growth for further hints on the strength of the world's largest economy.

Meanwhile, in Europe, investors will await monthly inflation data to assess the timing of when the European Central Bank will start unwinding its asset purchase program.

In the U.K., traders will focus on a report on manufacturing activity for further indications on the continued effect that the Brexit decision is having on the economy.

Elsewhere, market participants will be looking ahead to monthly data on China's manufacturing sector amid recent signs that momentum in the world's second largest economy remains strong.

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. U.S. employment report

The U.S. Labor Department will release its August nonfarm payrolls report at 8:30AM ET (1230GMT) on Friday.

The consensus forecast is that the data will show jobs growth of 180,000 this month, following an increase of 209,000 in July, with the unemployment rate forecast to hold steady at 4.3%.

Most of the focus will likely be on average hourly earnings figures, which are expected to rise 0.2% after gaining 0.3% a month earlier.

An upbeat employment report will point to an improving economy and support the case for higher interest rates in the coming months, while a weak report would add to uncertainty over the economic outlook and push prospects of tighter monetary policy further off the table.

2. U.S. revised 2nd quarter GDP

The U.S. Commerce Department is to release revised figures on second-quarter economic growth at 8:30AM ET (1230GMT) Wednesday.

The data is expected to show that the economy grew at a 2.7% annual rate in the April-June quarter, upwardly revised from a preliminary estimate of 2.6% and improving sharply from growth of 1.4% in the first quarter.

This week's calendar also features U.S. data on personal income and spending, which includes the personal consumption expenditures inflation data, the Fed's preferred metric for inflation.

Reports on ISM manufacturing sector activity, CB consumer confidence, ADP private sector payrolls and monthly auto sales figures are also on the agenda.

Markets remain skeptical the Fed will raise rates a third time this year due to worries over the subdued inflation outlook, but it is widely expected to start the process of reducing its balance sheet by September.

Investors are also likely to continue to fret over the latest headlines coming out of Washington.

3. Euro zone flash inflation figures

The euro zone will publish flash inflation figures for August at 0900GMT (5:00AM ET) Thursday.

The consensus forecast is that the report will show consumer prices rose 1.4% this month, after climbing 1.3% in July, remaining short of the ECB's target of just below 2%.

Perhaps more significantly, the core figure, without volatile energy and food prices, is seen holding at 1.2% from a month earlier.

Germany, France, Italy and Spain will produce their own CPI reports throughout the week.

The ECB kept borrowing costs at record lows earlier in August and called for patience and persistence in getting inflation back up to its target, with policymakers adding that discussions on the future of the bank’s asset purchase program would take place in the fall.

4. UK manufacturing PMI

The UK will release a reading on August manufacturing sector activity at 0830GMT (4:30AM ET) on Friday, amid expectations for a small dip to 55.0 from 55.1 a month earlier.

Some BOE policymakers have started to call for higher interest rates in the months ahead due to the recent surge in inflation, which was caused largely by the plunge in sterling following last year's Brexit vote.

But a recent run of weak data and deep uncertainty about the impact of Brexit on the economy have cooled the speculation that the BOE is poised to start removing its crisis-level stimulus.

5. Chinese manufacturing data

The China Federation of Logistics and Purchasing is to release data on August manufacturing sector activity at 0100GMT on Thursday (9:00PM ET Wednesday), amid expectations for a modest downtick to 51.3 from a reading of 51.4 in July.

The Caixin manufacturing index, which focuses more on small and mid-sized firms, is due at 0145GMT Friday (9:45PM ET Thursday). The survey is expected to dip by 0.1 points to 51.0.

Anything above 50.0 signals expansion, while readings below 50.0 indicate industry contraction.

China's economy grew a faster-than-expected 6.9% in the second quarter, matching the first quarter's pace, supported by solid exports, industrial production and consumption.

Stay up-to-date on all of this week's economic events by visiting: http://www.investing.com/economic-calendar/

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