European Session

During the European trading session, final manufacturing PMI (Purchasing Managers' Index) readings are scheduled for release covering the major Eurozone economies and the United Kingdom. PMI data provides a monthly snapshot of business conditions in the manufacturing sector, with readings above 50 indicating expansion and below 50 signaling contraction. The final figures typically confirm or slightly revise earlier flash estimates. Eurozone manufacturing has spent an extended period in contraction territory, so the sector's weakness is already well documented and factored into ECB policy deliberations following the bank's initial rate cut in June.

Given that these readings are unlikely to alter the current monetary policy stance of the respective central banks, market reaction is expected to be limited.

Also on the European calendar is the Swiss CPI (Consumer Price Index) report. The yearly inflation rate is projected to ease to 0.4%, a level that sits at the lower bound of recent readings and underscores the subdued price-pressure environment in Switzerland. The Swiss National Bank (SNB) is widely expected to maintain its current policy rate through the end of 2027 unless the inflation outlook shifts significantly. As a result, today's Swiss inflation data is not anticipated to be a market-moving catalyst.

Broader market attention is expected to remain focused on US-Iran geopolitical developments, with investors also looking ahead to the next US CPI report scheduled for release on August 14th—a release that will be closely watched for signals on the timing and magnitude of potential Federal Reserve rate adjustments.

American Session

The primary data release in the American session is the US ISM Manufacturing PMI, with consensus expectations pointing to a reading of 53.9, up from the prior month's 53.3. The Institute for Supply Management survey is one of the most closely watched gauges of US factory activity. The index spent much of 2023 in contraction before re-entering expansion territory earlier in 2024, making each monthly print relevant for assessing whether the factory-sector recovery is sustaining momentum.

S&P Global's recent US PMI readings indicated a slight deceleration in manufacturing growth, as some of the inventory accumulation observed in previous months began to show signs of moderating.

S&P Global noted that July experienced a concerning intensification of supply chain delays, accompanied by a renewed upturn in input price pressures, which constrained output growth and subdued demand. The ongoing conflict in the Middle East is expected to have further compounded these supply chain disruptions and inflationary concerns, raising downside risks to the near-term economic outlook.