Macroeconomics: The Day Ahead for 29 July

Today’s data and earnings schedule is quite busy, but lacks a real potential game changer, especially with the Fed and BoJ meetings in the headlights, and an array of advance Q2 GDO readings along with US and European inflation prints. There are the UK BRC Shop Price Index and credit aggregates and Spanish Q2 GDP to digest, ahead of Eurozone Inflation Expectations and the increasingly less sensitive ECB Wage Tracker, with the focus statistically likely to be on US Consumer Confidence, Goods Trade Balance and the first of this week’s labour market indicators, JOLTS Job Openings. The IMF offers its summer update on the World Economic Outlook, with the focus on the impact of trade tariffs on the global growth outlook, while Chile’s BCC is set to cut rates a further 25 bps to 4.75%. As with the statistical run, there are plenty of significant earnings reports, but none are likely to fundamentally change the equity market outlooks. Amongst the highlights are Nomura in Asia, AstraZeneca, Barclays, Endesa, Ferrovial and L’Oreal in Europe, as the US looks to Norfolk Southern, Procter & Gamble, Seagate Technology and Starbucks.

** U.S.A. – June Goods Trade Balance & JOLTS Job Openings, July Consumer Confidence **

The Goods Trade Balance is expected to be little changed at $-98.0 Bln vs. May’s $-96.4 Bln, though the focus will be on the m/m changes to Exports and Imports, especially after a very sharp -5.2% m/m in May grabbed the headlines, after all the prior month’s sharp fluctuations in Imports. Along with the wholesale and retail inventories, any sharp outliers may prompt some last-minute changes to forecasts for tomorrow’s advance Q2 GDP report.

But with all eyes on the Fed (leaving aside enormous political pressures), it will be JOLTS Job Openings and the Consumer Confidence’s ‘Labour Differential’ (Jobs Plentiful minus Hard to Get) which will attract most attention. JOLTS Job Openings have been steadily declining, but as the last report underscored, they are subject to often very sharp revisions that can later perspectives on labour demand, which is clearly slowing, though not at the sort of pace that would create genuine alarm on the FOMC, a renewed drop to 7.550 Mln after an unexpected jump to 7.769 Mln in May.

Consumer Confidence is expected to pick up to 96.0 from 93.0 on the back of the passage of the tax cuts in the ‘big beautiful bill’, and this too has been subject to sometimes quite sharp revisions. The Labour Differential has been steadily declining since December, reaching a post-COVID low of 11.1 in June, though still relatively solid on any long-term historical comparison.