Germany and Eurozone
On Tuesday, it was unveiled that Germany's economy contracted by 0.1% in the second quarter, defying analysts' expectations of a 0.1% growth. Year-over-year, GDP also dipped by 0.1%. Meanwhile, the eurozone economy showed resilience, growing by 0.3% in the second quarter, matching the first quarter's growth rate and surpassing the consensus forecast of 0.2%.
Germany: Inflation and Employment
In July, Germany's Consumer Price Index (CPI) rose to 2.3% from 2.2% in June, exceeding economists' predictions. The month-over-month CPI increased by 0.3% compared to June's 0.1%. At the same time, the number of job openings in the U.S. at the end of June was 8.184 million, slightly below the revised 8.230 million for May but still above the forecast of 8.020 million.
U.S.: Consumer Sentiment and Labor Market
The Conference Board's Consumer Sentiment Index rose to 100.3 in July, beating expectations of 99.7, despite ongoing concerns about high prices and interest rates. ADP data showed the U.S. added only 122,000 jobs in July, the lowest in six months and significantly below the expected 147,000.
Japan: Interest Rates and Quantitative Tightening
The Bank of Japan unexpectedly hiked its interest rate to 0.25% from the previous 0-0.1% at a two-day meeting that ended on Wednesday. A quantitative tightening (QT) plan was also adopted, which will reduce monthly bond purchases to 3 trillion yen from January to March 2026. The Governor of the Bank of Japan Kazuo Ueda mentioned that another rate hike this year is possible.
Australia: Inflation
Australia's Consumer Price Index (CPI) increased by 1.0% in the second quarter, consistent with the first quarter's rise and analysts' expectations. The year-over-year inflation rose to 3.8%, up from 3.6% in the previous period.
Canada: Economic Growth
Canada's economy grew by 0.2% in May, surpassing expectations of a 0.1% increase, though it was slower than the previous month's 0.3% growth.
United Kingdom: Interest Rates
The Bank of England cut interest rates by 0.25% to 5% on Thursday. Governor of the Bank of England Andrew Bailey indicated the bank would proceed cautiously, with investors anticipating another rate cut this year with a 55% probability.
U.S.: Manufacturing Sector
The ISM Manufacturing PMI dropped to 46.8 in July from 48.5 in June, marking the lowest level since November last year. A reading below 50 signals a contraction in manufacturing.
Friday's Expectations
The U.S. jobs report for July is expected on Friday, with nonfarm payrolls projected at 176,000, down from the previous 206,000. Average hourly earnings growth is anticipated to remain at 0.3%, and the unemployment rate is expected to be 4.1%.
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