Important things to keep an eye on in the markets for the upcoming week:

The Chicago Purchasing Managers’ Index (PMI) is used to assess the economic well-being of the manufacturing sector in the Chicago region. A value above 50 signifies growth in the manufacturing sector, while a value below 50 indicates contraction. The Chicago PMI can offer insights into predicting the ISM manufacturing PMI. If the Chicago PMI comes in higher than anticipated, it should be considered as a positive signal for the USD, suggesting a bullish outlook. Conversely, if the reading falls below expectations, it should be seen as a negative sign for the USD, indicating a bearish sentiment. Currently, the PMI is expected to be below 50, indicating a contraction in the manufacturing sector.

Today, the Eurozone will release preliminary estimates for July inflation and second-quarter GDP. This information will be essential in determining whether the European Central Bank may raise interest rates in September. While inflation has moderated, it still remains above the ECB’s target, and the data can influence the central bank’s policy decisions.

Data on China’s manufacturing activity, to be released at the beginning of the week, is expected to show a contraction for the fourth consecutive month in July. This highlights the need for stimulus measures to support the country’s post-pandemic recovery. Weak industrial profits and slow economic growth in the second quarter may impact China’s economic policies going forward.Top of Form

On Friday, there will be a report on the number of jobs added to the U.S. economy in July. This will also include information on the unemployment rate and average hourly earnings. The job market’s strength has been vital in shaping the view that the economy is heading for a “soft landing” with moderate inflation and strong growth. Investors will closely watch this data as it can impact the Federal Reserve’s decisions on interest rates.

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