Economic Data: This week’s focus is on US NFP, Canada and ECB rate decision!

Economic Data: This week's focus is on US NFP, Canada and ECB rate decision!

It will be a busy week with lots of important economic data coming out along with policy decisions from the Bank of Canada and the European Central Bank

The US farm payrolls report will attract attention over the weekend as markets try to gauge the future direction of US interest rates. The European Central Bank is likely to implement a rate cut that will set the Eurozone on a deviating rate from the US

The key economic data and events for this week

Monday – US Manufacturing PMI

The economic calendar will start with The US ISM Manufacturing PMI data. The numbers is expected at 49.8 from previous 49.2. The S&P Global Manufacturing PMI is expected that unchanged at 50.9.  Both indicators showed that business activity expanded to a two-year high. Which might weight on the dollar.

Tuesday – US JOLTS JOB

Swiss CPI M/M is scheduled to be released. The reading is expected to increase by 0.4% from 0.3% previously. The previous report beat expectations with a 1.4% year-on-year rate compared to the expected 1.1%, but the rate was still within the forecast of the SNB

The June rate cut is essentially a coin toss, but the negative surprise should be the market’s confidence in the new cut.

Thus, a bullish surprise could give the Swiss franc a bigger boost because markets should both price the possibility of a rate cut in June and wait for the central bank to raise the currency. of.

Further, The US Job Openings will be another data to watch on the day. The number are expected to fall to 8.350M compare to previous 8.488M. The last report showed once again a decrease as the labour market continues to come into better balance. The quits rate has also eased to a new cycle low and that should be good news for inflation as it generally leads wage growth.

Wednesday – Canada rate decision

The market reacted strongly to the BoC’s interest rate decision on Wednesday. Data rates are expected to drop from 5.00 percent to 4.75 percent.

Expectations were already leaning towards a rate cut after Canada’s latest CPI report, where the BoC’s preferred measure of core inflation surprised by weakening, eventually falling to the 1-3% target range.

The central bank is likely to refrain from making another rate hike, saying it depends on the data.

Second important data will the US ISM Services PMI. The economic data is expected at 51.00 compare to 49.4 prior. As previously mentioned, the S&P Global PMIs surprised to the upside with the services measure in particular beating expectations by a big margin.

Thursday – US Weekly Jobless claims, ECB Rate decision

The policy of the European Central Bank draws attention on Thursday. The ECB lowers interest rates from 4.00 percent to 3.75 percent. There has been a lot of talk about this rate cut, so let’s focus on what the central bank will do next. The latest economic data showed that the economy was picking up as the labor market remained strong.

This may give policymakers reason to be cautious, although the latest Eurozone PMI figures showed that inflationary pressures are still easing. The market expects two more interest rate hikes from the ECB this year, but as always, it depends on the data.    

In addition, The US Jobless Claims remains one of the most important publications to check each week because it is a more up-to-date indicator of the state of the labor market.

Initial claims are expected to come in at 215,000 this week, up from 219,000 previously. However, the flexible labor market can make it difficult to achieve the goal. It can weigh on the dollar.

Friday – US NFP

The market reacted strongly to US non-farm payrolls data on Friday. 180,000 jobs are expected to have been added in May, compared with 175,000 in April, with the unemployment rate unchanged at 3.9 percent. Average hourly wages Y/Y are expected to be 3.9% vs. 3.9% ahead, while the M/M metric is 0.3% against. 0.2% before.

Labor market data for May has been broadly positive so far, with SandP Global PMI reporting a slowdown in job losses, US jobless claims remaining strong and jobs data on US consumer confidence. the report bounces. Therefore, the bias should be towards good publication

Happy Trading!

Commodity Samachar
Learn and Trade with Ease

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