This week will see release of July manufacturing PMIs from major economies, US non-farm employment data, as well as policy meeting of the Bank of England (BOE).

China’s official manufacturing PMI, due for release today, is expected to be unchanged from June in July. Despite downward pressure on the economy, official manufacturing PMI will still hover around 50. Manufacturing PMI in the euro zone is likely to hold largely stable in July. US July manufacturing PMIs released by Markit and ISM, are likely to change little from June’s 52.9 and 53.2. 

The UK’s manufacturing and service PMIs both fell sharply in June, boding ill for July’s manufacturing PMI. Should the figure turn out to be negative, hopes will grow for the BOE to roll out stimulus measures. 

The BOE will announce policy decision for its August meeting on Thursday. The BOE made no changes in monetary policy during its July meeting while waiting for more economic data. Should July manufacturing PMI remain disappointing, there will be no reason for the BOE to refrain from taking action. It seems that the US Fed and Bank of Japan are waiting for other central banks to take action before deciding what to do.  

The US will release July non-farm payrolls on Friday. US Q2 GDP came as disappointment. As such, even if July non-farm payrolls remain positive, the positive impact on the US dollar will be limited.  

• [Editor:zhang yuan]