Key Events This Week: ISM, Trade Balance And More Earnings

Last week was by far the busiest of the year, with a perfect storm confluence of macro, earnings and central bank newsflow avalanche. Not surprisingly, this post-payrolls week is much quieter; among the US data releases that matter will be Tuesday‘s ISM report (forecast at 51.2 versus 50.8 previously), particularly its employment component, and Thursday’s initial jobless claims (225,000 versus 218,000) will be closely watched in light of the payroll revisions.

Tuesday also brings the international trade balance (-$75 billion versus -$71.5 billion), which will include country and product-level details. These will allow for a recalculation of the average tariff rate. DB economists estimate that, as of 7 August, when country-specific rates take effect, the average tariff rate will be 19.6% on a static basis using 2024 trade weights.However, this is likely an upper bound, and after adjusting for overestimation, the more realistic average is closer to 15%. Thursdays US data also includes productivity (expected at +2.5% versus -1.5%) and unit labour costs (+1.0% versus +6.6%).

In Europe, the highlight will be the Bank of England‘s rate decision- DB expects the central bank to cut the Bank Rate to 4%, marking the fifth quarter-point reduction in the current cycle. Additional European data will come from trade and industrial production figures across key Eurozone economies, with Germany’s factory orders due on Wednesday. CPI prints are expected in Switzerland today and in Sweden on Thursday.

On the earnings front, the US season has passed its peak, but notable reports are expected from Eli Lilly, Palantir, and AMD. Other S&P 500 names reporting include McDonald‘s, Walt Disney, and Uber. In Europe, attention will be on Novo Nordisk, Siemens, and Rheinmetall. Novo’s report on Wednesday will be particularly interesting following last week‘s profit warning. In Japan, Toyota and Sony are set to report. Saudi Aramco, the world’s largest energy company by market capitalization, will release its results tomorrow.

Monday August 4

• Data: US June factory orders, Japan July monetary base, Switzerland July CPI
• Earnings: Palantir, Mitsubishi UFJ, MercadoLibre, Vertex, Williams Cos

Tuesday August 5

• Central banks: BoJ minutes of the June meeting
• Earnings: AMD, Caterpillar, Amgen, Eaton, Arista Networks, Pfizer, Recruit Holdings, TransDigm, BP, Apollo, Mitsubishi Heavy Industries, Marriott, Zoetis, Diageo, Deutsche Post, Coupang, Infineon, Fidelity National Information, Super Micro Computer, DuPont de Nemours, Snap
• Auctions: US 3-year Notes ($58bn)

Wednesday August 6

• Data: UK July construction PMI, Japan June labor cash earnings, Germany June factory orders, July construction PMI, France Q2 private sector payrolls, Italy June industrial production, Eurozone June retail sales
• Central banks: Fed's Cook and Collins speak
• Earnings: Novo Nordisk, McDonald's, Walt Disney, Uber, Shopify, AppLovin, DoorDash, Thomson Reuters, Siemens Energy, Airbnb, Emerson Electric, Fortinet, CRH, Energy Transfer, Generali, Honda Motor, Glencore, Occidental Petroleum, Rockwell Automation, Commerzbank, Bayer, NRG Energy, Vonovia, Carlyle, DraftKings, Global Payments, Duolingo, Lyft
• Auctions: US 10-year Notes ($42bn)

Thursday August 7

• Earnings: Eli Lilly, Toyota, Siemens, Deutsche Telekom, Allianz, Sony, Gilead Sciences, ConocoPhillips, DBS, Constellation Energy, Rheinmetall, Petroleo Brasileiro, Vistra, Flutter Entertainment, Atlassian, Cheniere, Datadog, Block, Kenvue, Take-Two, Warner Bros Discovery, AP Moller - Maersk, Sandoz, Pinterest, Expedia, Rocket Lab, Twilio, NuScale Power, Maplebear, Peloton
• Auctions: US 30-year Bonds ($25bn)

Friday August 8

• Central banks: Fed's Musalem speaks, BoJ's summary of opinions from the July meeting
• Earnings: Munich Re, Wendy's

* * *

Monday, August 4

10:00 AM Factory orders, June (GS -4.2%, consensus -4.8%, last +8.2%); Factory orders ex-transportation, June (consensus +0.2%, last +0.2%); Durable goods orders, June final (GS -9.3%, consensus -9.3%, last -9.3%); Durable goods orders ex-transportation, June final (GS +0.2%, consensus +0.2%, last +0.2%); Core capital goods orders, June final (last -0.7%); Core capital goods shipments, June final (last +0.4%)

Tuesday, August 5

• 08:30 AM Trade balance, June (GS -$61.0bn, consensus -$61.3bn, last -$71.5bn)
• 09:45 AM S&P Global US services PMI, July final (consensus 55.1, last 55.2)
• 10:00 AM ISM services index, July (GS 52.0, consensus 51.5, last 50.8): We estimate that the ISM services index increased by 1.2pt to 52.0 in July, reflecting sequential improvement in our non-manufacturing survey tracker (+1.9pt to 53.2 in July) but a headwind from residual seasonality.

Wednesday, August 6

• There are no major data releases scheduled.
• 02:00 PM Fed Governor Cook and Boston Fed President Collins (FOMC voter) speak: Federal Reserve Governor Lisa Cook and Boston Fed President Susan Collins will participate in a panel discussion with Central Bank of Chile Board Member Luis Felipe Céspedes. The discussion will be moderated by Boston Fed Director of Research Egon Zakrajšek. Q&A is expected. On July 15th, Collins said that “financial data point to the possibility that the impact of tariffs may be lessened somewhat by an ability for firms to decrease profit margins and for consumers to continue spending, despite higher prices.” But she also noted that she “do[es] not rule out scenarios with larger or more persistent effects from tariffs and ongoing economic uncertainty.”
• 04:10 PM San Francisco Fed President Daly (FOMC non-voter) speaks: San Francisco Fed President Mary Daly will speak at the 2025 Anchorage Economic Summit. Text and Q&A are expected. On July 17th, Daly said that she believes “the current policy rate is modestly or moderately restrictive” and has “penciled in a nominal neutral rate of 3%.” She also noted that the June SEPs median projection of two rate cuts in 2025 is a reasonable outlook to have.

Thursday, August 7

• 08:30 AM Nonfarm productivity, Q2 preliminary (GS +2.1%, consensus +2.0%, last -1.5%); Unit labor costs, Q2 preliminary (GS +1.2%, consensus +1.5%, last +6.6%)
• 08:30 AM Initial jobless claims, week ended August 2 (GS 218k, consensus 221k, last 218k); Continuing jobless claims, week ended July 26 (consensus 1,947k, last 1,946k)
• 10:00 AM Atlanta Fed President Bostic (FOMC non-voter) speaks: Atlanta Fed President Raphael Bostic will participate in a virtual fireside chat on monetary policy with the Florida Institute of CFOs. Q&A is expected. On August 1st, Bostic said, “Going into this week, I thought the risks to inflation were much greater than the risks to employment… [but the July nonfarm payroll number and the revisions to prior months job gains] suggest that maybe the economy is weakening more broadly than what we had been seeing.” He also noted that he still expects “one cut this year” but is open to “rethinking [that after getting] more data before the next meeting.”
• 11:00 AM New York Fed 1-year inflation expectations, July (last 3.0%)

Friday, August 8

• There are no major data releases scheduled.
• 10:20 AM St. Louis Fed President Musalem (FOMC voter) speaks: St. Louis Fed President Alberto Musalem will participate in a fireside chat hosted by Mississippi Valley State University. Text and Q&A are expected. On July 10th, Musalem said that “tariffs could have a temporary effect on inflation and a one-time effect on prices, [but] they could also have a more persistent impact on inflation,” and that “it‘s too soon to tell which way it’s going to go.” He also noted that from his perspective, the current “monetary policy is modestly restrictive.”