Friday’s U.S. jobs report and Wednesday’s minutes of the Federal Reserve’s June meeting are expected to be the main events this week, shortened by a holiday, amid concerns about the prospect of a recession. Stock indexes in the U.S. are entering an uncertain third quarter after the worst first half of the year since 1970, when the Fed began rapidly tightening its monetary policy to suppress the highest inflation in decades. Meanwhile, Australia’s central bank looks set to raise rates by half a percent on Thursday as inflation continues to rise. Here’s what you need to know at the start of the week.

1. U.S. JOBS REPORT

Recent economic data has added to signs that the U.S. economy is “cooling” amid the Fed’s sharp policy tightening, so investors will be keeping a close eye on Friday’s non-farm payrolls report to see how the labor market behaves given the Fed’s inflation/employment commitment.

Economists expect 270,000 jobs created in June, down from 390,000 in the previous month, but still indicative of the strength of the labor market. The unemployment rate is expected to remain steady at 3.6%, indicating demand is still robust even as the economy slows. Average hourly earnings are expected to rise 5% from a year ago.

A weaker-than-expected employment report could heighten recession fears and bolster the case for a less abrupt pace of rate hikes after the Fed’s last 75 basis point increase.

2. FOMC PROTOCOL.

The Fed is expected to continue raising rates by another 75 basis points at its upcoming July meeting, but action in September is less clear.

The minutes of the central bank’s June meeting on Wednesday will give investors some insight into how officials see the future trajectory of the interest rate as the market remains focused on the prospect of a recession.

Meanwhile, the European Central Bank is due to release the minutes of its June meeting on Thursday, when it announced plans to hold its first interest rate hike since 2011 in July, followed by a potentially larger increase in September as eurozone inflation hit a record high.

3. ECONOMIC DATA FROM THE U.S.

The US will release Job Openings (JOLT) data for May on Wednesday, with the number expected to fall only slightly to 11 million from 11.4 million in April, equivalent to nearly 2 job openings for every unemployed American.

A shortage of suitable workers to fill these vacancies has driven up wages as companies compete for labor, fueling an accelerating inflationary spiral.

The U.S. will also release the ISM services business activity index for June after last week’s ISM manufacturing index indicated a slowdown in price growth for new orders, and data on factory orders, initial jobless claims and consumer credit will also be released.

Several Fed speakers are scheduled to speak during the week, including New York FRB head John Williams, who will speak on Wednesday and again on Friday, as well as Fed Governor Christopher Waller and St. Louis FRB head James Bullard.

4. THE U.S. MARKET BEGINS THE THIRD QUARTER

Wall Street’s 3 major stock indexes rose sharply on Friday, recovering from early losses on the first trading day of the third quarter after the stock market’s worst first half of the year in decades. However, all 3 indexes suffered sharp losses for the week.

Market participants are now preparing for several potentially key events in July that could determine the direction of the market in the coming months.

Investors will pay attention to Friday’s U.S. jobs report ahead of next week’s release of the country’s inflation data, which will factor into the Fed’s decision-making at its upcoming meeting on July 26-27.


Second-quarter earnings reports will begin July 11 and will show whether companies can continue to meet their estimates despite rising inflation and growth concerns.

5. RBA RATE HIKE

Market watchers expect the Reserve Bank of Australia (RBA) to deliver another half-percent interest rate hike on Tuesday as it tries to curb inflation hitting a 20-year high, the first increase of that magnitude in several consecutive meetings.

The bank is revising its expectations after Bank Governor Philip Lowe raised the rate by half a point last month, instead of increasing it by 25 basis points as expected.

A weaker Australian dollar is contributing to higher inflation, along with soaring energy and labor costs. The conflict in Ukraine and quarantine in China, Australia’s largest trading partner, have also added to inflationary pressures.