Tomorrow's Macro Roadmap: Canada Labour Market Report / Japan PPI / DE & FR Final HCPI (watch core) / ECB's VP Vujčić
The day at a glance
The main event is Canada's June labour force survey at 14:30 CET. After May's blockbuster gain of 88,000 jobs, the market looks for a sharp slowdown to around 10,000, with the unemployment rate holding at 6.6%. The outcome matters for how long the Bank of Canada can stay on hold.
Overnight, Japan's producer prices at 01:50 CET test how far the energy shock is feeding through the supply chain, and the euro area brings final June inflation from Germany (08:00 CET) and France (08:45 CET) alongside Italian industrial output. Brazil's June CPI and Mexican industrial production round out the afternoon. The IEA publishes its monthly oil market report at 11:00 CET, and the ECB's Boris Vujčić speaks at 08:15 CET.
Data Preview
Japan's producer price index for June will be released at 01:50 CET. Producer inflation is seen rising to 6.8% year-on-year from 6.3%, with the monthly pace easing to around 0.3% after a run of larger gains. The increase reflects the pass-through of higher energy and oil-related input costs into a widening range of goods. A firmer print reinforces the case that price pressure is broadening beyond fuel, a consideration for the Bank of Japan as it weighs its next move.
Editor's Note: A print at or above consensus would keep the pressure on the BoJ to follow last month's hike, and firm the yen's rate-gap narrative at the margin. The more important test is how much of this factory-gate pressure feeds into consumer prices in the months ahead.
The euro area's two largest economies release final June inflation on Friday. Germany's harmonised rate is seen confirmed at 2.4% year-on-year, down from 2.7%. France's harmonised rate is seen at 2.0%, down from 2.8%. As final releases, they usually confirm the preliminary estimates, so the potential for surprise is low. Economists focus on the core and services details for the underlying inflation trend.
Editor's Note: Final national prints rarely move the euro, but they feed the euro-area aggregate that frames the ECB debate. Coming the morning after the June meeting account, any revision to the core or services components is the only fresh information here. The decisive data for the September ECB meeting are the flash readings due before that meeting.
The International Energy Agency releases its monthly oil market report at 11:00 CET. It updates supply, demand, and inventory estimates, and this month it lands amid the US-Iran conflict having flared again and with traffic in the Strait of Hormuz disrupted. The report is a reference point for the oil market's supply-demand balance. With crude having climbed on the renewed fighting, the focus is on the agency's read of Gulf supply and any revision to its demand outlook.
Canada's labour force survey for June is released at 14:30 CET. After May's outsized gain of 88,000 jobs, which pulled the unemployment rate down three-tenths to 6.6%, the consensus looks for a much smaller increase of around 10,000, with the jobless rate steady at 6.6%. The question is how much of May's 88,000 gain was a one-off. One bank expects census hiring and FIFA World Cup games to lift public administration and leisure and food services. Still, a softer June would fit the view that the labour market is stabilising rather than accelerating. However, one bank cited slower immigration as capping the labour force and wage growth that is positive but no longer accelerating. One analyst also notes that an ageing workforce is holding down any rise in unemployment.
Editor's Note: For the Bank of Canada, the jobs report is the key input to whether it can keep rates on hold. A payback in line with expectations would support the case for patience. A sharp downside miss would revive rate-cut talk, while an upside surprise on top of firm wages would harden the on-hold message. The full-time versus part-time split is also worth watching.
Central Bank Speech Previews
ECB Vice President Boris Vujčić speaks at 08:15 CET. He became the ECB's number two, succeeding Luis de Guindos, earlier in June. Speaking in London on 23 June at a monetary-policy forum organised by Barclays and the CEPR, he defended the ECB's 11 June quarter-point hike as robust across all the scenarios as we expect inflation to remain for a longer period above the target. He said both headline and core inflation would be 'higher for longer, into 2027', and that this underpinned the June move. He stressed that longer-term inflation expectations remain anchored at the 2% target and that wages show 'no sign of second-round effects', with compensation per employee coming down. He described euro-area growth as 'relatively resilient' as the bloc navigates another supply shock, with war-driven inflation, then running at 3.2%, widening beyond energy.