The week ahead gets busier starting with US payrolls data tonight (8 Jul, 830 pm SG/KL time); China data dump – CPI on Sunday, trade on Wed, Activity and 2Q GDP on Fri; Singapore also release its advanced estimates of 2Q GDP on Thu as well as CPI data from Euro-area and US on Fri.

      The week ahead gets busier starting with US payrolls data tonight (8 Jul, 830 pm SG/KL time); China data dump – CPI on Sunday, trade on Wed, Activity and 2Q GDP on Fri; Singapore also release its advanced estimates of 2Q GDP on Thu as well as CPI data from Euro-area and US on Fri. Also to note, as many as 10 Fed officials are scheduled to speak at different occasions next week. There are also 3 central bank meetings – BNM (Wed); BoK, BoE (Thu).

       For US Jun payrolls, consensus expects +180k for NFP (vs. +38k prior); +0.2% m/m (unchanged from prior) for hourly earnings and 4.8% (vs. 4.7% prior) for unemployment rate. We believe a much stronger than expected Jun NFP (above +200k) and massive upward revision on May NFP, coupled with upside surprise in hourly earnings could lead to re-pricing of Fed rate hike expectation. That means UST yields and USD could rebound. But in the event payrolls do not exceed expectations, we could see a resumption of carry plays in favor of NZD, IDR, MYR, amidst an environment of still easy (and probably further expectation for even easier) monetary conditions. Our in-house model shows S$NEER at about 1% above the implied mid-point of 1.3635 levels, with the upper bound at 1.3365 and lower bound at 1.3905. USDMYR could still be confined to 3.98 – 4.14 range with some upside bias.

       That said, we see technical upside risks to USD. On AXJs, we are biased to buy USD on dips vs SGD around 1.34 levels. While we remain bearish on GBP, we see risk of rebound towards 1.31-handle. Elsewhere, the rally in gold appears to show some fatigue (around $1,380 resistance) and could see some short-term pullback towards $1,300 levels. We are also cautious of crude Brent prices, potentially testing $42.60 (200 DMA) on the downside.

       For BNM meeting (Wed), we see a potential cut to SRR (now at 3.5%) and rising likelihood of 25bps cut to OPR (now at 3.25%), coupled with a dovish statement. We expect BoK and BoE to keep rate on hold at 1.25% and 0.50%, respectively on Thu. We acknowledged consensus expects 25bps cut by BoE. 

       Other data we are watching for the week includes Malaysia May IP; PH May exports; BoE Carney to speak on financial stability in parliament on Tue; Fed’s Beige Book; Euro-area May IP; RBNZ Asst. Gov McDermott speaks on Wed; US Jun PPI; AU Jun labor report and inflationary expectations on Thu; US Jun retail sales, CPI, IP; Jul Empire Mfg, consumer sentiment; ID Jun trade and PH May overseas remittance data on Fri. G20 Trade Ministers are also scheduled to meet in Shanghai on 9 – 11 Jul. JP Upper house elections on 10 Jul.