The U.S. dollar just managed to stage a recovery during the last week of May. In the U.S., last week was relatively quiet on the political front and this helped the greenback to regain some of the lost ground. The minutes of the meeting released by the Fed hinted at a hike in the interest rates in June, but did not provide a clear statement to this effect. However, a comment made by Merkel as regards the weak euro helped in lifting the common currency at last on a temporary basis. Meanwhile, The U.K. witnessed a devastating terror attack, but the event’s influence on the price of sterling was just minimal. China’s credit rating was downgraded, but the news is yet to be fully digested by the market. The loonie strengthened a little bit after the Bank of Canada expressed optimism and the OPEC decided to extend the production cuts.
As the page turns to June, the events scheduled for the upcoming week include the non-farm payrolls, the Fed’s inflation figure and consumer confidence. Here is an outlook on the key events for the week:
#1: European Central Bank President Mario Draghi Speaks (05/29/2017 Monday 13:00 GMT)
Mario Draghi, president of the European Central Bank, is scheduled to testify as regards the monetary policy developments and European Union’s economy before the Committee of Economic and Monetary Affairs in Brussels. Markets often remain volatile during his speeches because traders make an attempt to decipher clues on interest rate changes.
#2: U.S. CB Consumer Confidence (05/30/2017 Tuesday 14:00 GMT)
According to the data released by the Conference Board, consumers were a little bit less confident in the month April as the index slid to the 120.3 level from the 124.9 level recorded in the previous month. However, the index continues to remain close to the highs before the crisis. While the Present Situation Index declined to 140.6 from 143.9 in March, the Expectations Index slid to to 106.7 from 112.3 in the previous month. The CB confidence is expected to come in at 120.1 in May.
#3: Reserve Bank of New Zealand Financial Stability Report (05/30/2017 Tuesday 21:00 GMT)
Released twice a year, the Reserve Bank of New Zealand’s financial stability report provides into the central bank’s views on inflation as well as other economic factors that are likely to impact interest rate decisions in the future. The central bank usually holds a media conference 120 minutes after the release of the report and webcasts the same from their website.
#4: Canada GDP (05/31/2017 Wednesday 12:30 GMT)
The Canadian economy remained flat in February after recording a 0.6 percent expansion in the month before. The reading for February also came in below market expectations for a growth of 0.1 percent as the operations in the service sector and the goods-producing industries contracted. Output declined for industries in manufacturing, mining, quarrying, oil and gas extraction, wholesale trade, transport and warehousing and utilities sectors. Additionally, construction growth slowed down a little bit, but retail trade remained unchanged. On the other hand, finance and insurance experienced growth. Canada’s GDP is expected to grow by 0.3 percent in March.
#5: Australia Private Capital Expenditure (06/01/2017 Thursday 1:30 GMT)
In Australia, private capital expenditure declined 2.1 percent on quarter-on-quarter basis in the fourth quarter of last after it contracted 3.3 percent in the previous quarter. It measures the increase or decrease in the total value of the new capital expenditures that has been made by private businesses. It is considered to be a leading indicator of the country’s economic health. Private capital expenditure is expected to increase by 0.6 percent in the first quarter of this year.
#6: Australia Retail Sales (06/01/2017 Thursday 1:30 GMT)
In Australia, retail sales unexpectedly dropped by 0.1 percent on a seasonally adjusted basis in March after the figure for the previous month was revised upward to a decline of 0.2 percent. The reading for March missed analysts’ estimate for an increase of 0.3 percent in retail sales. While sales declined in household goods and food retailing, department stores and cafes, restaurants and takeaway food services, sales rose in clothing, footwear and personal accessory retailing and other retail segments. Retail sales in Australia is expected to rise by 0.3 percent in April.
#7: U.K. Manufacturing PMI (06/01/2017 Thursday 8:30 GMT)
On a seasonally adjusted basis, the Markit/CIPS Manufacturing PMI jumped to the three-year high of 57.3 in April from the four-month low reading of 54.2 recorded in the previous month. The reading for April also beat market expectations that the index will reach the 54 level. Manufacturing production increased at the highest rate in three months on the back of strong new work inflows since January 2014. New work flowed in from both domestic as well as export clients. Further, employment continued to increase and stocks rose at a fast pace. Meanwhile, the purchase price inflation rate eased to a 9-month low. However, the average output charges rose further. The manufacturing PMI is expected to come in at 56.5 in May.
#8: U.S. ADP Non-Farm Employment Change (06/01/2017 Thursday 12:15 GMT)
The data provided by the Automated Data Processing (ADP) is considered to be a warm up to the official jobs report scheduled to be released on Friday. It provides an estimate of the private sector jobs. In April, the ADP non-farm payroll data revealed a increase of 177,000 jobs. It beat analysts’ estimate for an increase of 175,000 jobs. The forecast for the month of May is that as many as 181,000 jobs will be added.
#9: U.S. Unemployment Claims (06/01//2017 Thursday 12:30 GMT)
The number of American people filing for jobless benefits rose by 1,000 to 234,000 in the latest reporting period. The reading came in lower than the market expectations for 238,000 claims. The claims for unemployment benefits has remained below the 300,000 mark for 116 weeks in a row. Further, the four-week moving average, which eliminates weekly volatility, dropped to 235,250. This is the lowest level in as many as 44 years. Forecast for the next reporting period: 239,000 claims.
#10: U.S. ISM Manufacturing PMI (06/01/2017 Thursday 14:00 GMT)
The purchasing managers’ index data is released by the Institute for Supply Management for the manufacturing sector before the official non-farm payrolls report. In the absence of report for the services sector, the manufacturing report assumes a great deal of importance. In April, the index dropped to 54.8 (from 57.2 reported for March), which was below the market expectation for a reading of 56.5. However, it reflected good growth. The reading for April was the lowest since December last year as new orders and employment numbers expanded at a reduced pace. Forecast for May is 54.7 level.
#11: U.S. Crude Oil Inventories (06/01/2017 Thursday 15:00 GMT)
Crude oil stocks in the U.S. fell by 4.43 million barrels during the week that ended on May 19, 2017, according to the Energy Information Administration. In the previous week, crude oil stocks declined by 1.80 million barrels. However, the figure for the last reporting period surpassed market expectations for a drop of 2.40 million barrels. The current inventory level of 516.30 million barrels is the lowest since mid-February. This suggested that the deal for production cut agreed upon by the OPEC has started working.
#12: U.K. Construction PMI (06/02/2017 Friday 8:30 GMT)
On a seasonally adjusted basis, the Markit/CIPS construction PMI edged up to 53.1 in April from 52.2 in the previous month. The reading also came in above analysts’ expectation that it will hit the 52 level. The figure pointed to a very strong construction expansion since December 2016. This is because the civil engineering projects increased at the fastest rate in last one year and activity in the residential building sector rose sharply. Forecast for May: 52.7
#13: Canada Balance of Trade (06/02/2017 Friday 12:30 GMT)
Canada reported that trade deficit narrowed to C$0.14 billion in March after the deficit for the previous month was revised upward to C$1.08 billion. However, the reading for March came in above market expectation for a deficit of C$0.9 billion. Exports rose 3.8 percent to C$47 billion because of stronger energy products and consumer goods sales. Imports increased by 1.7 percent to C$47.1 billion. Forecast for April: neither deficit nor surplus.
#14: U.S. Average Hourly Earnings (06/02/2017 Friday 12:30 GMT)
In the U.S., the average hourly earnings rose 0.30 percent in the month of April from the previous month. Forecast for May: an increase of 0.2 percent.
#15: U.S. Non-Farm Payrolls (06/02/2017 Friday 12:30 GMT)
Non-farm payrolls report is the last one prior to the Fed’s interest rate decision next month. It could contribute a great deal to raising or maintaining the interest rates. The report for the month of April was mixed. It did show a very healthy jobs gain of 211,000 numbers after the figure for March was revised downward to an increase of 79,000. Market had expected a jobs gain of 185,000. Forecast for May: 186,000
#16: U.S. Unemployment Rate (06/02/2017 Friday 12:30 GMT)
Unemployment rate in the U.S. fell to 4.4 percent in April from 4.5 percent in March. The reading came in better than analysts’ expectation of 4.6 percent. This is the lowest jobless rate ever since May 2007. The number of people who are unemployed dropped by 146,000 to 7.1 million. The labor force participation rate slipped to 62.9 percent from the 11-month high of 63 percent recorded in March. Forecast for May: 4.4 percent