The U.S. dollar posted strong gains until Thursday last week but pulled back a little ahead of June open as the Federal Reserve remained non-committal as regards future policy measures. After opening on a relatively calm note, the euro lost ground against the dollar amid European Parliamentary elections and made a dive towards a two-year low. Meanwhile, the GBP/USD pair was pushed to a new five-month low.
The key economic releases scheduled for the upcoming week include interest rate announcements by RBA and ECB and nonfarm employment data form the U.S. Having said that here is an outlook on the releases scheduled from around the world:
#1: China Caixin Manufacturing PMI (06/03/2019 Monday 01:45 GMT)
In China, the Manufacturing PMI dropped to 49.40 in the month of May from 50.20 in the prior month. Forecast for June 2019: 50.0
#2: U.S. ISM Manufacturing PMI (06/03/2019 Monday 14:00 GMT)
In the U.S., the ISM Manufacturing PMI fell to the 52.8 level in April from 55.3 in the previous month. The reading for the month came in below analysts’ expectations of touching the 55.0 level. The reading for April indicated the weakest factory activity growth ever since October 2016 amid slower increases in new orders, employment, and production.
#3: Australia Retail Sales (06/04/2019 Tuesday 01:30 GMT)
In Australia, retail trade increased 0.3 percent on a month-over-month basis in March after the reading for the prior month was revised upward to an increase of 0.9 percent. The reading for March beat analysts’ expectations for an increase of 0.2 percent. Sales increased at a softer rate for food; clothing, personal accessory, and footwear; and household goods. Meanwhile, sales declined at department stores and other retail stores. Sales at cafes, restaurants, and takeaway food counters rebounded. For the January quarter, retail sales declined 0.1 percent. This is the first quarterly decline ever since the September quarter of 2012. Forecast for April 2019: an increase of 0.2 percent is on the cards
#4: Australia RBA Cash Rate (06/04/2019 Tuesday 04:30 GMT)
In the meeting held in May, the Reserve Bank of Australia decided to keep the key cash rate unchanged at the record low level of 1.5 percent, extending the period of monetary policy inaction and defying speculation that the monetary policy may be eased following the lower-than-expected inflation rate during the January quarter of this year. However, policymakers expressed confidence that the headline inflation would hover around the 2.0 percent mark in 2019 supported by oil prices increases in recent times. They projected that the underlying inflation would be around 1.75 percent this year and 2.0 percent next year. The Monetary Policy Committee members also noted that the economy’s spare capacity is higher and a further improvement in the labor market is needed for inflation to remain consistent with the target. Forecast for June 2019: 1.25 percent
#5: Australia RBA Rate Statement (06/04/2019 Tuesday 04:30 GMT)
The Reserve Bank of Australia releases the Rate Statement on the first Tuesday of every month, except January. The central bank uses it as a tool to communicate with investors as regards the monetary policy. It provides the outcome of the Monetary Policy Committee members’ decision on setting interest rates and commentary on the economic conditions that impacted their decision. More importantly, it provides an economic outlook and clues on future decisions.
#6: Australia RBA Governor Philip Lowe Speaks (06/04/2019 Tuesday 09:30 GMT)
Philip Lowe, Governor of the Reserve Bank of Australia, is scheduled to speak in Sydney at the central bank’s Board Dinner. Questions from the audience expected. Markets often turn volatile during his speeches. This is because traders make an attempt to understand the direction of interest rates.
#7: U.S. Fed Chair Jerome Powell Speaks (06/04/2019 Tuesday 13:55 GMT)
Jerome Powell, the Federal Reserve Chair, is scheduled to speak on the policy strategy, communication practices, and tools of the Federal Reserve at an event hosted by Chicago Federal Reserve Bank. Markets often turn volatile during his speeches. This is because traders make an attempt to understand the direction of interest rates.
#8: Australia GDP (06/05/2019 Wednesday 01:30 GMT)
Australia’s GDP grew 0.2 percent on a seasonally adjusted basis in the final quarter of 2018, slowing down from the 0.3 percent expansion reported in the prior period. The reading for the period missed analysts’ expectations for a 0.3 percent growth. This is the weakest GDP growth rate ever since the September quarter of 2016. Private consumption growth was modest and dwelling investment contracted. For the year 2018, the economy grew 2.3 percent, but at the slowest pace ever since the second quarter of 2017. Forecast for the first quarter of 2019: 0.4 percent
#9: U.S. ISM Non-Manufacturing PMI (06/05/2019 Wednesday 14:00 GMT)
In the U.S., the ISM Non-Manufacturing PMI fell to the 55.5 level in April from the 56.1 level in March. The reading for the month came in below analysts’ expectations of 57. The reading for April pointed towards the weakest services sector expansion ever since July 2017. This can be attributed to a slowdown in employment and new orders. However, service providers were optimistic about the overall business conditions though there are concerns as regards employment resources. Forecast for May 2019: 55.6
#10: Japan BoJ Governor Haruhiko Kuroda Speaks (06/06/2019 Thursday 08:25 GMT)
Haruhiko Kuroda, Governor of the Bank of Japan, is scheduled to speak in Tokyo at the Institute of International Finance Spring Meeting. Questions from the audience expected. Markets often turn volatile during his speeches. This is because traders make an attempt to understand the direction of interest rates.
#11: U.K. BoE Governor Mark Carney Speaks (06/06/2019 Thursday 09:00 GMT)
Mark Carney, Governor of the Bank of England, is scheduled to speak in Tokyo at the Institute of International Finance Spring Meeting. Questions from the audience expected. Markets often turn volatile during his speeches. This is because traders make an attempt to understand the direction of interest rates.
#12: Euro Area ECB Monetary Policy Statement (06/06/2019 Thursday 11:45 GMT)
Generally, the European Central Bank changes the Monetary Policy Statement a little bit at each release. Traders focus on these changes to decipher clues with respect to interest rate decisions. The central bank uses it as a tool to communicate with investors as regards the monetary policy. It provides the outcome of the Monetary Policy Committee members’ decision on setting interest rates and commentary on the economic conditions that impacted their decision. More importantly, it provides an economic outlook and clues on future decisions.
#13: Euro Area ECB Press Conference (06/06/2019 Thursday 12:30 GMT)
Scheduled eight times in a year, the President and Vice President of the European Central Bank hold a press conference about 45 minutes after the announcement of the Minimum Bid Rate. The press conference lasts for about an hour. It has two parts. In the first part, they read a prepared statement. The second part is all about answering questions by the press. As the questions can lead to unscripted answers, heavy market volatility can be expected.
#14: Canada Trade Balance (06/06/2019 Thursday 12:30 GMT)
The merchandise trade deficit of Canada narrowed to C$3.21 billion in the month of March after the deficit for the previous month was revised upward to C$3.42 billion. Analysts had expected a deficit of C$2.45 billion. Exports increased 3.2 percent on a month-over-month basis, led by energy products. Imports rose 2.5 percent, led by consumer goods. For the first quarter of this year, Canada’s trade gap widened to C$10.4 billion from C$7.8 billion for the same period of last year, the biggest trade gap ever since the June quarter of 2016.
#15: Canada Employment Change and Unemployment Rate (06/07/2019 Friday 12:30 GMT)
Canada added 106,500 jobs in April, after shedding 7,200 employment in the prior month. The reading for the month beat analysts’ expectations for an addition of 10,000 workers. This is by far the strongest employment gain on record and was boosted by full-time and part-time hiring of workers. Employment increased in Ontario, Quebec, Alberta, and Prince Edward Island. Job additions remained unchanged in the other provinces. Further, several industries including wholesale and retail trade, construction, culture and recreation, information, other services, public administration, and agriculture reported gains in employment. While the number of employees in the private and public sectors increased, there was no change in the self-employment sector.
The unemployment rate fell to the 5.7 percent level in April from 5.8 percent in the prior month, while analysts expected the reading to come in at 5.8 percent.
#16: U.S. Average Hourly Earnings (06/07/2019 Friday 12:30 GMT)
The average hourly earnings of all employees on the private nonfarm payrolls in the U.S. increased 0.2 percent on a month-on-month basis in April. The increase was at the same pace as in the previous month. However, it was below analysts’ expectations for an increase of 0.3 percent. The annual increase in wages was 3.2 percent, the same rate as in the previous month. Analysts had expected an increase of 3.3 percent. Forecast for May 2019: an increase of 0.3 percent is on the cards
#17: U.S. Non-farm Employment Change and Unemployment Rate (06/07/2019 Friday 12:30 GMT)
In the U.S., nonfarm payrolls rose by 263,000 in April after the reading for the prior month was revised downward to an increase of 189,000. The reading for the month beat analysts’ expectations of 185,000 job additions. Job gains in business and professional services, construction, social assistance, and health care were very significant.
Meanwhile, the unemployment rate dropped to 3.6 percent in the month of April from the 3.8 percent level in the prior month. The jobless reading for the month was also better than analyst’s expectations of 3.8 percent. This is the lowest jobless rate ever since December 1969. The number of unemployed people in the country dropped 387,000 to 5.8 million and the participation rate declined to 62.8 percent from 63.0 percent last month.