WEEK AHEAD: AUGUST 1

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NFP, BOE, RBA & Q2 Earnings

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Number one:

Non-Farm Payrolls and Unemployment rate.

NFP and unemployment rate data are expected to be heavily watched by investors on Friday. A significant consideration for the Federal Reserve when evaluating the markets' response to tighter monetary policy is the number of new jobs added and the unemployment rate. As per the estimates, the number of new jobs created in July was 240 thousand, which is lower than the previous reading of 380 thousand for June. This partly explains the dollar pullback last week.

Number two:

Bank of England interest rate decision

The Bank of England is dealing with the highest inflation in four decades, a problem magnified by supply-chain disruptions and skyrocketing energy costs around the world. A Reuters poll of economists concluded that the Bank of England is likely to avoid a larger interest rate rise in August and instead continue to the relatively moderate 25 basis point rises it has been delivering. This less hawkish stance could weigh on Sterling.

Number three:

Reserve Bank of Australia Interest Rate Decision

On Tuesday, the Reserve Bank of Australia will make a rate decision. Australian inflation expectations are skewed to the upside and in addition to supply chain disruptions and rising oil costs, further monetary tightening may be on the way. The Australian dollar's current interest rate is 1.35 per cent, but inflation has risen to 6.1 per cent. The Australian dollar should benefit from any more interest rate rises if they are accompanied by hawkish guidance from the RBA.

Number four:

US companies continue Q2 earnings season

The US stock market's results season is always a big deal for investors. This week, expect big news from companies such as PayPal Holdings, Airbnb, Moderna, eBay, and many more. Investors may refocus their investment decisions on earnings and quarterly results after a stretch of worrying about the economy and the risk of recession which has left sentiment in the stock market insecure.

Number five:

Eurozone Unemployment data for June

Away from central banks and NFP, another data highlight this week is Eurozone unemployment. Expectations for June suggest an unemployment rate of roughly 6.7 per cent, a small uptick from the previous month's reading of 6.6 per cent.