With Brexit clouding outlook, U.S. payrolls to tilt focus back to Fed
By Hugh Lawson
LONDON (Reuters) - Investors will start to peek beyond the Brexit-dominated headlines in the coming week to gauge the outlook for the global economy, and what impact an expected rebound in U.S. job creation will have on central banks eyeing looser policy.
Britain's shock vote to leave the European Union has cast a cloud of doubt over the world economic outlook that is unlikely to clear for months to come as economists - and central banks like the U.S. Federal Reserve - see how the referendum result impact on hard data.
Much of the media focus in Europe is likely to be on the political bloodletting as Britain's ruling Conservative Party, also known as the Tories, pick a new leader.
"Our suspicion is that we will not hear anything concrete on the UK's path towards Brexit for some time now, with the Tory leadership contest raging away," economists at Investec said in a weekly note to investors.
The main data in the coming week is therefore likely to be U.S. non-farm payrolls numbers due on Friday, which are expected to show employers in the world's largest economy added 180,000 jobs last month, a preliminary Reuters poll found, after May's surprisingly weak reading of just 38,000.
(Poll data: reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=USNFAR%3DECI)
"Not only service-industry corporations but also the construction industry should have maintained the momentum in the US labor market," analysts at DZ Bank wrote in a report to clients.
Overall, recent signs of stability in U.S. manufacturing, low numbers of layoffs and solid consumer spending data have suggested that economic growth regained speed in the second quarter. Continued...