Week Ahead: Non-farm figures – the Feds missing puzzle piece?

28 June 2021 By Lachlan Meakin


Equity Markets

World equity markets staged a decent comeback last week after the shock of the US Federal Reserve’s hawkish pivot caused a sell off the week before.

Last week saw multiple central bank members from the Fed, European Central Bank and Bank of England talking down inflation fears and holding the “transitory” narrative, this helped to calm markets and saw investors pile back into equities, with a strong showing from tech stocks especially driving the S&P 500 and NASDAQ to all-time highs.

The week ahead will be an important test with high impact inflation and employment figures scheduled to be released in the US.

Economic Releases – the week ahead


Thursday will see the OPEC-JMMC meeting which will be attended by representatives from the 13 OPEC members and 11 other oil-rich nations. On the table for discussion will be whether to further hike output in August on the global economic recovery.

Recent reports suggest that OPEC will signal further production increases of around 500k more barrels per day from August onwards. With the strong rally in oil prices, there is confidence in the oil cartel that the market will be able to absorb the increased output.

Any significant deviance from the expected 500k figure will likely see volatility in WTI and Brent crude prices.

Source: Refinitiv


The Bank of England’s Governor Andrew Bailey is scheduled to speak Friday morning AEST. Not much deviance is expected from last week’s Monetary Policy Summary where the BoE struck an upbeat but overall dovish tone. Traders will be listening in to try to decipher any extra clues that may be given regarding the bank’s view on when to start tightening.


Thursday night sees the ISM Manufacturing PMI released in the US. While this is not normally an important inflation gauge it has taken on more importance recently. Manufacturers are in a good position to see inflation in raw materials and an elevated reading will be a sign that inflation may not be as “transitory” as the Feds recent narrative suggests.

The biggest figure of the week will be released Friday night with the US non-farm employment change and unemployment rate set to be reported where the creation of 700k jobs and an unemployment rate drop to 5.7% is expected.

This figure will be closely watched by investors as it could determine whether they start positioning for a withdrawal of cheap money, or whether all that is premature. The US economy has bounced back strongly on the back of these easy money policies, with consumption booming and inflation running hot. Only the labor market is lagging behind which is still around 7.5 million jobs short of pre-pandemic levels. The Fed has used this as a reason to continue its accommodative policies and a strong reading could see a surging USD as rate rise expectations take hold.

Source: Refinitiv

Tuesday, 29 June 2021 
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
8.594 0 0.397 0.701 0.474 0 0
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
10.153 0 0 0 0 27.302 6.544

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