PMIs and non-farm jobs report provide trade war distraction

The Independence Day celebrations fail to interrupt a fairly busy first week of July.

UK
It’s a pretty standard month-opening calendar for the UK. The one-two-three intrigue of the manufacturing, construction and services PMIs are released on Monday, Tuesday and Wednesday, and will likely set the tone for the comparatively empty second half of the week. The quality of this data will be of great interest to the pound, which is desperate for a more concrete signal that rates could well rise in August.

As for the earnings calendar, all the good stuff is concentrated on Wednesday and Thursday. The former sees Topps Tiles and Sainsbury’s, with investors after an Asda update from the orange supermarket (more below), while the latter brings with it Purplebricks, Superdry, Associated British Foods and Bovis Homes.

US
Even with Wednesday off for the 4th July, there’s plenty for US investors to get their chops around this week. The Markit and ISM manufacturing PMIs are on Monday, while Thursday stuffs in the services PMIs, ADP non-farm reading AND the FOMC meeting minutes from June. Friday’s the biggie, however, with the latest non-farm jobs report having the potential to give an indication of whether or not another Fed rate hike will be on the cards any time soon.

Of course, the ongoing trade war tensions – which had a tendency to flare up at the start of the week – could render all of this moot.

Eurozone
The Eurozone broadly follows the same pattern as the UK and US this week. The manufacturing PMIs join the unemployment rate on Monday, with the region-wide retail sales on Tuesday, the services PMIs on Wednesday and the German industrial production reading on Friday.

Stock of the week: J Sainsbury PLC – Q1 Results
While the Asda-merger news understandably drew focus at the end of April, the release also came with Sainsbury’s full year results. Like-for-like sales climbed a solid 1.3%, with nderlying pre-tax profit jumping 1.4% to £589 million.

It might be too early for a substantial update on the deal, though investors will be on the lookout for any titbits. The Competition and Markets Authority still have to give the sector-changing deal the go ahead, while there looks like there are plenty of opponents to the supermarket marriage in the government, with CEOs Mike Coupe and Roger Burnley given a roasting by the Food and Rural Affairs Committee.

As for its quarterly performance, the latest report from Kantar Worldpanel showed that it was the only supermarket to see a decline in sales for the 12 weeks to June 17th, the 0.2% drop leading to a 0.4% slide in its market share. It’ll be interesting to see what kind of figures that translates to on Wednesday.

• UK 100
• Wall Street
• GBP/USD
• Gold

Open (Monday)

7646.8

Close (Thursday)

7613

Change

-0.4%

High

7665.7

Low

7487.6

Open (Monday)

24448.5

Close (Thursday)

24217.1

Change

-0.9%

High

24571.1

Low

23986.2

Open (Monday)

1.3316

Close (Thursday)

1.3166

Change

-1.1%

High

1273.8

Low

1247.2

Open (Monday)

1273

Close (Thursday)

1254.2

Change

-1.5%

High

1273.8

Low

1247.2