US and eurozone jobs data, Macron visits Beirut

US and eurozone jobs data, Macron visits Beirut

Jobs will feature heavily in the coming week, with monthly employment data from the US and eurozone set to show how the recovery from the pandemic is bearing up in two of the main global economic zones.

There will also be some second-quarter growth figures worth keeping an eye on and several Federal Reserve policymakers will make speeches before purdah is imposed ahead of the next rate-setting meeting.

These will be of particular interest after the Fed revealed last week that it will take a more tolerant approach to temporary increases in inflation.

Macron returns to Beirut

On the global stage Emmanuel Macron is due back in Beirut on Monday, where he will follow up on reconstruction efforts after a huge chemical explosion devastated the capital at the beginning of August.

The French president has called for a “new political pact” for the Lebanese people, making it clear that reform was needed if the country was to receive the financial support it needs to resolve its economic crisis.

However, the factionalism and horse-trading that has long dogged Lebanese politics is delaying progress and there is no agreement on a credible candidate to lead a new government.

French stimulus package

An announcement on France’s economic recovery plan, originally due last week, is now scheduled for Wednesday.

Prime minister Jean Castex told business leaders last week that the €100bn stimulus package would continue to cut taxes on business, including property taxes for industry, local value added tax and corporation tax. A quarter of the recovery fund money would go to small and medium-sized businesses.

Charlie Hebdo trial

Staying in France, the trial begins of the 14 people suspected of involvement in the January 2015 attacks on the Charlie Hebdo newspaper and other targets. The trial is scheduled to run until November 10.

Iran nuclear deal

Senior officials from the countries signed up to the Iran nuclear deal — France, Britain, Germany, Russia, China and Iran — hold a quarterly meeting for the first time since February after a delay linked to the coronavirus pandemic. The US withdrew from the deal in 2018, leading to tensions over sanctions.

A quarterly report detailing Iran’s atomic activities from the UN nuclear watchdog is due soon. Iran agreed recently to open two sites to the International Atomic Energy Agency, a sign of its willingness to co-operate with the deal.

M&S-Ocado deliveries

Ocado will find out what its customers valued more — its slick website and customer service or the upmarket groceries supplied to it by Waitrose — when Marks and Spencer’s produce replaces that of Waitrose on Tuesday.

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For M&S, the Ocado tie-up is a key part of its strategy to boost food profits as the coronavirus pandemic piles pressure on its clothing business.

It will take M&S, whose food shoppers spend an average of less than £20 per visit, into the online grocery market — the fastest-growing part of the sector — for the first time. It also comes just after the 136-year-old retailer announced 7,000 job losses, the biggest cull in its history.


Argentina will learn on Monday whether enough creditors have accepted its offer to restructure $65bn of foreign debt, as Buenos Aires insisted that the country’s ninth sovereign debt default would be its last.

If all goes according to the government’s plan, the deal is expected to bring an end to the default process that began in May and avoid costly creditor lawsuits. But some analysts and investors are sceptical about whether Argentina has turned a corner.


Only a light dusting of companies to watch out for this week. In the US Campbell Soup is likely to post an increase in sales on Thursday, helped by higher demand for packaged foods during the pandemic.

Video-conferencing platform Zoom is expected to post a rise in quarterly revenue on Monday as more people use its service to stay connected and work remotely.

FTSE buyout group Melrose Industries reports on Thursday, having already taken a coronavirus hit. In a July trading update it reported revenues had slumped by 27 per cent during the first six months of 2020, leading it to seek more cost cuts and job savings.

Melrose added that it had rebounded to break even on an adjusted operating profit basis in June as the recovery began to take hold and it expected to report a small underlying operating profit for the first half.

The housebuilding sector has enjoyed a rebound since lockdown as tax breaks and demand for suburban properties bucked the usual summer slowdown, with a record number of homes being bought and sold between mid-July and early August.

However, this is unlikely to filter through to Barratt Developments’ full-year results on Wednesday, when disruption to construction and transactions is likely to mean lower annual earnings. London-focused rival Berkeley Group has a trading update on Friday.

Central banks

It’s quiet again on the meeting front — Colombia is set to cut rates to a record low on Monday, while Australia and Chile meet on Tuesday, when both are forecast to keep rates on hold. Ukraine meets on Thursday, where a rate cut is possible.

However, there is no shortage of speeches this week. Fed vice-chair Richard Clarida on Monday speaks about the new monetary policy framework, Fed governor Lael Brainard addresses the same topic on Tuesday and New York Fed president John Williams is due on Wednesday to discuss the economy and Covid-19.

Bank of England policymakers, including governor Andrew Bailey, update the UK parliament on Wednesday.

Mr Bailey will talk about the future of cryptocurrencies and stablecoins on Thursday and Michael Saunders is due to speak about the economy and Covid-19 on Friday.

The Fed issues its Beige Book of economic conditions on Wednesday.

Economic data

Jobs figures will be in focus this week. US employment data, out on Friday, will show investors whether the number of jobs added in August has extended a rebound that began in May as lockdowns eased.

Non-farm payroll figures are set to show 1.58m jobs were added in August, down slightly from 1.76m in July, according to economists surveyed by Bloomberg. The July data marked the third consecutive month the gauge was in positive territory after cratering in April owing to the coronavirus pandemic.

The number of Americans receiving state unemployment support, however, fell to 14.5m from 14.8m by mid-August, far below the peak of 24.9m in May.

US initial jobless claims will also be closely monitored, after hovering around the 1m mark last week.

Canada has jobs figures out on Friday as well, when employment is again expected to rise for the fourth month in a row.

There will be more signs of whether Europe’s labour market can keep shrugging off the historic recession caused by the pandemic when the region’s jobless figures for July are published on Tuesday. 

The unemployment rate for the eurozone increased from 7.2 per cent in March to 7.8 per cent in June. On average, economists expect the furlough schemes to have helped the jobless rate to actually dip slightly to 7.7 per cent in July.

The strength of the labour market is crucial to support retail sales, which fell dramatically when the pandemic struck but have rebounded strongly since May and returned to pre-pandemic levels in June. Economists on average expect the positive trend to continue when eurozone retail sales for July are released on Thursday with a 5.9 per cent rise.

Manufacturing purchasing managers’ index surveys around the world are out on Tuesday and service sector PMIs on Thursday, with China’s government PMI data on Monday.

There are also some gross domestic product figures worth keeping an eye on this week.

India is expected to report a yearly contraction of about 17.5 per cent on Monday.

Brazil’s data is expected to show a 9.4 per cent quarterly contraction. In annual terms, this points to growth falling 10.7 per cent for the second quarter.

Data due on Monday is forecast to show Turkey’s economy contracted by 10.1 per cent in the second quarter.

Australia’s economy is also expected to have shrunk when it releases data on Wednesday, with some economists forecasting a 7.5 per cent contraction.

Tuesday brings manufacturing data from China. The measure is expected to show solid growth again in August, with economists predicting a reading of 52.3, slightly below July’s level of 52.8. Any reading of more than 50 shows expansion. That would further solidify a sense of economic recovery, even from a weak base, as new cases of Covid-19 remain low.

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