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  • Investing.com - In what is set to be a hectic week, investors will get monetary policy updates from a number of major central banks, with Wednesday’s Federal Reserve decision the highlight. The calendar also features trade talks, the U.S. jobs report for July, euro zone GDP and another deluge of earnings reports, including from iPhone maker Apple.

    Here’s what you need to know to start your week.

    1. Federal Reserve decision

    The Fed is widely expected to cut interest rates for the first time in more than a decade when it delivers its latest monetary policy decision on Wednesday. Money markets have priced in a quarter percentage point rate cut, after expectations for a half percent cut briefly soared mid-month, before pulling back.

    The central bank has faced repeated criticism from President Donald Trump over its rate increases and the ongoing reduction of its balance sheet. Trump believes the measures are holding back growth.

    That balance sheet reduction, known as quantitative tightening, is set to end in September, but with only a month to go, why wait? Many Fed policymakers are leery of having two policy tools -- interest rates and balance sheet size -- working at cross-purposes.

    2. BOE, BOJ meetings

    In a busy week for central bank meetings, the Bank of England is expected to keep rates on hold at its meeting on Thursday, as policymakers wait for the fog of Brexit to clear.

    Investors will be watching for the BOE’s assessment of the British economy's current downturn, and how it might respond in the event of a hard Brexit under new Prime Minister Boris Johnson.

    Sterling has fallen more than 5% since May, largely on fears of a no-deal Brexit. Johnson, less than a week into the job, has already clashed with Brussels after he again called for the withdrawal deal to be rewritten and vowed to take Britain out of the EU on Oct. 31 regardless.

    The Bank of Japan is also expected to hold steady when it delivers its policy decision on Tuesday, but could reinforce its commitment to keep interest rates at rock bottom. The European Central Bank’s decision to hold last week gives the BoJ some breathing room amid a shift to a more dovish stance by central banks worldwide.

    3. Trade talks

    Trade talks between the U.S. and China are due to resume on Tuesday with U.S. trade representative Robert Lighthizer and Treasury secretary Steven Mnuchin travelling to Shanghai. Vice Premier Liu He is expected to lead the talks for China.

    With Trump's November 2020 re-election campaign not in full swing yet and Wall Street at record highs, Trump may not be feeling much pressure for the 'big beautiful deal' he has touted but markets will still want something.

    The previous round of talks collapsed in May and Trump increased tariffs on $200bn of Chinese imports to 25% from 10% and threatened to slap 25% tariffs on a further $300bn worth of products.

    4. U.S. jobs report

    In a big week for economic data the U.S. jobs report for July will steal the spotlight, with a consensus forecast for the economy to add 160,000 jobs, slowing from 224,000 in June. The unemployment rate is expected to tick down to 3.6%, while average hourly earnings are forecast to rise 0.2% month-on-month and 3.2% year-on-year.

    Market watchers will also get updates on manufacturing, trade, pending home sales, personal income and consumer confidence this week. The bulk of the data will come after the Fed meeting and will confirm whether a rate move was necessary as investors try to gauge the monetary policy outlook for the rest of the year.

    Elsewhere, euro zone data on Wednesday is expected to show that growth slowed in the in the second quarter, while an inflation report the same day is expected to indicate that inflation remains below the ECB’s target of just under 2%.

    5. Earnings

    Investors can look forward to another slew of U.S. earnings this week with 170 companies listed on the S&P 500 set to report results, including Apple, General Electric (NYSE:GE), Spotify (NYSE:SPOT), Qualcomm (NASDAQ:QCOM), Verizon (NYSE:VZ), General Motors (NYSE:GM) and ExxonMobil (NYSE:XOM).

    Apple’s fiscal third quarter earnings will be in focus as investors wait to see if handset sales have improved, particularly in China amid the ongoing U.S.-Sino trade dispute. Apple reported that quarterly sales dropped 5% from a year earlier in the previous quarter, largely due to weak growth in China where iPhone sales fell by 17%.

    The tech giant’s services business, which has helped drive profits, will also be closely watched.

    Apple's (NASDAQ:AAPL) stock price has climbed 33% this year, closing Friday’s session at $207.74.

    --Reuters contributed to this report.

     

    © Reuters.

     

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    Дата публикации: 28.07.2019