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Playbook for the new week
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Loading...Hopes for progress in the long-term Sino-American trade war will continue to shape the mood of the markets this week after the two largest economies in the world agreed on Saturday to resume talks.
Investors will also monitor the US jobs report for June on Friday. US markets will be closed for Independence Day on Thursday and will close early on Friday.
Meanwhile, OPEC will meet earlier this week and is expected to prolong oil cuts after a weekend agreement between Russia and Saudi Arabia.
1. Trade negotiations
The United States and China agreed on Saturday to resume trade talks after US President Donald Trump offered concessions, including no new tariffs, and alleviating restrictions on the Huawei technology company to reduce tensions with Beijing.
There is no deadline for making progress on the deal and both parties remain in disagreement over significant parts of the deal. The last major round of talks collapsed in May.
The financial markets, which have been shaken by the almost annual trade war, are likely to encourage the ceasefire. Washington and Beijing have struck billions of dollars in the import of the other, threatening to hinder the already sluggish world economy. These tariffs remain in force until the negotiations are resumed.
2. Economic data in the United States
The US jobs report in June, due to be published on Friday, is likely to be key to the Federal Reserve's interest rate decision at its next meeting in late July.
The economy is expected to have created 164,000 jobs in June, while interest rates show a 100 percent reduction rate of 25 basis points on July 31.
But traders may hurry. Fed Chairman Jerome Powell dropped the pressure to cut interest rates. And the economy looks broadly stable - unemployment, which is 3.6%, is the lowest in half a century and probably stays there in June.
Other significant data on economic data include the latest US Supply Management Service and US Services Service Inventory Reports as well as Factory Procurement and Trade Reports.
3. Fed Speakers
Fed Deputy Chairman Richard Clarida will speak on Monday. Earlier this month, he said the central bank is willing to cut interest rates if necessary, but noted that the broad outlook for the US economy remains positive.
Fed's New York president John Williams has to take part in a panel discussion on global economic and monetary policy in Zurich on Tuesday.
Cleveland President Fed Loretta Mester, a member of the Federal Open Market Committee, who does not have the right to vote, must submit remarks to an individual event on the same day.
4. OPEC Meeting
The Organization of Petroleum Exporting Countries will meet in Vienna on Monday, and will meet with non OPEC member countries - known as OPEC + - to discuss the continuation of the deal - due to expire on Sunday - to curb of oil production with 1.2 million barrels per day to support prices.
But Saturday's statement by Russian President Vladimir Putin that he and Saudi Prince Mohammed bin Salman have agreed to extend the current deal with production has made the meeting virtually unnecessary.
How much influence each decision will have is also controversial. Oil production in the US has reached a record 11 million barrels per day in 2018 and is about to reach 12.4 million barrels a day this year, according to the Energy Information Agency, which offset the cuts in OPEC production.
Since the beginning of the year, the raw Brent index has risen by more than 25% but still remains below its highest levels since 2018.
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