The week started with some excitement about China's supposed new "flexibility" on the Yuan sending equity markets up around the world. While this announcement may have a political benefit at the approaching G20 meeting, it is a lot less clear that this added flexibility is really new or significant for U.S. consumers.
Similarly, the FOMC (Federal Open Market Committee) begins two days of meetings on Tuesday. While a minor change in the language of the FOMC statement on Wednesday could impact interest rates and the markets briefly, it is unlikely that the Fed is going to change course to any significant degree, particularly given the recent signs of a potentially slowing U.S. economy.
On the other hand, Thursday's jobless claims report will provide another potential insight into today's struggling job market. Gallup's weekly Job Creation Index (JCI) surged to its highest level of the year (+11) last week suggesting that the the government will report jobless claims declined for that period -- claims tend to be inversely related to the JCI.
Friday's Reuter's/University of Michigan's consumer sentiment index might also move the markets. Although Gallup's Economic Confidence Index improved slightly last week, June's Index results are running a little worse than those of May. Whether the consumer sentiment index will accurately reflect that decline is uncertain -- given its relatively small sample size.
Most importantly, it seems as though the Gulf Coast oil spill will continue unabated for another week. Americans seem to know instinctively that this is not only horrible to watch, but also will have asignificantly negative economic impact -- not only on those directly affected -- but also on all Americans.
