The week ahead in markets and economics

As the second half of 2025 begins, investors and policymakers worldwide are preparing for a week packed with high-impact economic data. With inflation, growth, and employment trends in focus, the outcomes could shape monetary policy decisions across major economies. In the US, it is a truncated week as the country celebrates Independence Day on Friday.

UK: Mortgage and GDP data in focus – Monday 30 June

Mortgage Approvals Data (May) – Monday 30 June

The Bank of England published mortgage lending and approvals data this morning, which showed a slight uptick in activity. Net borrowing of mortgage debt by individuals went up by £2.8bn to £2.1bn in May. This marks a reversal from April, when borrowing had fallen sharply by £13.8bn to -£0.8bn Meanwhile, net mortgage approvals also increased slightly in May with approvals for remortgaging increasing by 6,200 to 41,500 – the largest increase since February 2024.

Final first quarter UK GDP figures – Monday 30 June

The UK economy grew strongly in the first quarter of the year, official data confirmed on Monday morning. The Office for National Statistics said UK gross domestic product (GDP) rose 0.7% in the first three months of the year, unrevised from the first estimate published in May. It was the strongest quarterly performance in a year and made Britain the fastest growing of the major G7 economies. However, the figures related to a period before the Labour government’s tax increases and Donald Trump’s tariffs came into effect.

US: jobs market in spotlight

ISM Manufacturing PMI – Tuesday 1 July

ISM Services PMI – Thursday 3 July

These reports are published monthly by the Institute for Supply Management (ISM) and are based on surveys of purchasing managers across the country. The ISM PMIs are among the earliest monthly indicators of economic activity, often released before official government data. They provide a timely gauge of business sentiment, demand, employment, and pricing pressures. A reading above 50 indicates expansion; below 50 signals contraction.

Manufacturing PMI: consensus is around 49.5, indicating continued contraction in the manufacturing sector.
Services PMI: consensus is 52.0, suggesting modest expansion after May’s surprise dip to 49.9, which marked the first contraction in nearly a year.

Durable goods (June) – Thursday 3 July

Economists expect a modest increase of around 1.2% month-over-month in durable goods orders for June, following a surprisingly strong 16.4% surge in May, which was driven largely by a spike in transportation equipment orders. Excluding transportation – a volatile category – orders are expected to rise by 0.4%, indicating steady but unspectacular growth in core capital goods.

Non-farm payrolls (June) – Thursday 3 July

The June non-farm payrolls (NFP) report is due on Thursday instead of the usual Friday release due to the holiday-shortened week. It is expected to show a gain of 129,000 jobs, down from 139,000 in May. The unemployment rate is forecast to hold steady at 4.2%, while average hourly earnings are seen rising 0.3% month-on-month, down from 0.4%.

Why it matters: These figures are crucial for the Federal Reserve’s rate path. A cooling labour market could reinforce expectations of a rate cut later this year, especially if wage growth slows, easing inflationary pressures.

EU: Eurozone inflation expected to tick up

Euro-area inflation data (June) – Tuesday 30 June

Flash inflation data for the Euro-area is expected to show headline inflation rising to 2.0%, up from an eight-month low, while core inflation is projected to remain steady at 2.3%.

Why it matters: The European Central Bank (ECB) is closely watching inflation trends. A rise in headline inflation could delay rate cuts, while stable core inflation may support a more dovish stance.

China: economic momentum in PMI data

China released its official manufacturing and services purchasing manager indices PMIs on Monday. The country’s official NBS PMI Manufacturing rose slightly to 49.7 in June, up from 49.5 and matching expectations. While still in contraction for a third consecutive month, the improvement in production (51.0) and new orders (50.2) suggests some stabilisation in activity. Large manufacturers led the gains, with their PMI rising to 51.2, but conditions for small enterprises deteriorated sharply, with a 2-point drop to 47.3. The Non-Manufacturing PMI also inched up to 50.5 from 50.3, supported by a rebound in construction activity. The Composite PMI rose to 50.7 from 50.4, reinforcing the picture of a subdued recovery.

Japan: business sentiment eyed

Tankan business sentiment index (June) – Tuesday 1 July

The Bank of Japan (BOJ) is scheduled to release the Tankan (Short-Term Economic Survey of Enterprises in Japan) for June on 1 July. It is a gauge of corporate confidence and analysts expect a slight improvement amid stable domestic demand.

Why it matters: The Tankan survey influences Bank of Japan policy and investor sentiment toward Japanese equities and the yen.

Corporate earnings

The earnings season is winding down and it is a quiet week for corporate profit reports.

The second-quarter 2025 earnings season will begin in mid-July, with the US typically kicking off the season. The unofficial start is usually marked by major banks such as JPMorgan Chase, Wells Fargo, and Citigroup, which will report results next week.

In the UK, earnings season tends to follow a less concentrated schedule, but many FTSE 100 companies begin reporting from mid-to-late July, with a heavier concentration of results in early August.