The week ahead is fairly straightforward in that there are no EU Summits, no major European elections, no Fed Policy decisions, and nothing else major on the calendar besides good, old fashioned domestic economic data. It's not even that some of these events over the past two weeks have been significant market movers. In fact, they were surprisingly unimportant, but markets remained ready to react to them regardless.
In a world of Rumsfeldian "unknown unknowns," the current week is more about "known unknowns," namely, the Employment Situation Report standing alone on Friday as the focal point of a weekly data set that, in large part, speaks to employment. In other words, we know that we don't know where NFP ("non-farm payrolls," the headline component of the Employment Situation Report) will come in, but we do know that we want to know!
Why do we want to know? Because we know that the Fed's chief monetary policy consideration is employment. Logically, we'd assume that a progressively deteriorating employment picture would raise the odds of some iteration of QE3. Whether or not that proves stimulative for the labor market doesn't matter. Markets will trade an uptick (or downtick) in QE3 expectations. It's pretty much the only thing they'll trade apart from a European collapse.
So to whatever extent the unknown unknowns remain unknown (and don't produce market-moving headlines) this week, the focus on Employment redoubles. From there, to whatever extent employment data deviates from expectations, markets should move higher or lower accordingly.
Live Econ Calendar:
Week Of Mon, Jul 2 2012 - Fri, Jul 6 2012
Mon, Jul 2
ISM Manufacturing PMI
ISM Mfg Prices Paid
Tue, Jul 3
ISM-New York index
Factory ex-transp mm
Factory orders mm
Wed, Jul 4
Independence Day – Markets Closed
Thu, Jul 5
Mortgage market index
Mortgage refinance index
ADP National Employment
Initial Jobless Claims
Continued jobless claims
ISM N-Mfg Bus Act
ISM N-Mfg PMI
Fri, Jul 6
Unemployment rate mm
* mm: monthly | yy: annual | qq: quarterly | "w/e" in
"period" column indicates a weekly report
* Q1: First Quarter | Adv: Advance Release | Pre: Preliminary
Release | Fin: Final Release
* (n)SA: (non) Seasonally Adjusted
* PMI: "Purchasing Managers Index"
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