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Canada and the UK posted negative growth, reflective of the severe economic conditions gripping the world’s major economies. There has been an improvement in the manufacturing and construction sectors, although most PMIs remain in contraction territory.

The British economy contracted in the second quarter by 2.2 percent. This was a downward revision from the initial estimate of 2.0 percent. This was the worst quarterly fall since 1979, as the coronavirus has had a huge negative impact on economic activity. In the manufacturing sector, the Final PMI came in at 50.1, just above the 50.0 line, which separates contraction from expansion. The Final Services PMI came in at 47.1, which was a much-improved figure over the previous reading of 29.0 points.

Canada’s GDP contracted by 11.6% in April, after a decline of 7.2% beforehand.

German inflation improved to 0.6%, after a decline of 0.1% beforehand. In the eurozone, inflation rose to 0.3%, compared to 0.1% a month earlier. The core read was much stronger, at 0.8%. Germany and eurozone manufacturing PMIs were up slightly in June, but remain in the mid-40s, which indicates contraction. France was a bright spot, with a reading of 52.3, which points to expansion.

In the U.S., manufacturing improved sharply, as Manufacturing PMI climbed from 39.8 to 49.6 points. The estimate stood at 50.0, which separates contraction from expansion. Durable goods orders sparkled in May. The headline figure climbed 4.0%, rebounding after a decline of 7.4 percent. The core reading surged 15.8%, rebounding from a read of -17.2% beforehand. The Conference Board consumer confidence index jumped from 85.9 to 98.1 and easily beat the estimate of 91.6 points. Nonfarm payrolls shot up in June, with a gain of 4.80 million. This comes after a May release of 2.50 million.
  1. US ISM Non-Manufacturing PMI: Monday, 12:30. The PMI has recorded two successive releases below the 50-level, which points to contraction. The index improved to 45.4 up from 41.8 beforehand. The uptick is expected to continue, with an estimate of 50.0 points.    
  2. US Unemployment Claims: Thursday, 12:30. Jobless claims continue to drop, as the US labor market slowly shows signs of recovery. The indicator dropped to 1.42 million last week, down from 1.48 million beforehand. This was higher than the estimate of 1.35 million. Will the uptick continue in the upcoming release?
  3. US Producer Price Index: Friday, 12:30. The headline reading rebounded in May with a gain of 0.4%, after a sharp loss of 1.3% beforehand. The core reading declined by 0.1% in May, its third decline in four months. The forecast for the headline read stands at 0.4% and the core release is projected at 0.1 percent.
  4. Canada Employment Report: Friday, 13:30. Canada’s economy rebounded from a loss of over 1.99 million jobs in April, with a gain of 289.6 thousand in May. Analysts are expecting better numbers in June, with a forecast of 550.0 thousand. The unemployment rate climbed from 13.0% to 13.7% in May, but this beat the forecast of 15.0%. The estimate for June is 12.5 percent.
  5. RBA Rate Decision:  Tuesday, 4:30. The RBA is expected to maintain the cash rate at 0.25%, where it has been pegged since March. Investors will be carefully combing the rate statement, looking for clues as to future monetary moves. With AUD/USD soaring 12% in Q2, policymakers will have to give some thought to raising rates to keep a lid on the value of the Aussie.
  6. British Construction PMI: Monday, 8:30. Construction activity was close to rock-bottom in April, with an abysmal reading of 8.2 points. The PMI improved to 28.9 in May, and is expected to climb to 46.0 in the upcoming release. The 50-level separates contraction from expansion.