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The Week Ahead – China Stats and Central Banks in the Spotlight

By:
Bob Mason

It is a busy week ahead. While the US ISM PMI is the key stat for the Fed, China trade and inflation numbers and stats from Germany will also move the dial.

The Week Ahead in the hands of China numbers - FX Empire

In this article:

On the Macro

It’s a busier week ahead on the economic calendar. However, several economic indicators will likely influence sentiment toward central bank policy outlooks following the last round of economic indicators. The RBA and the Bank of Canada are also in action.

For the Dollar:

ISM Non-Manufacturing PMI numbers for May will kickstart the week. Investors will need to look beyond the headline figure, with the price, new order, and employment sub-components also needing consideration.

Other stats on Monday include factory orders and finalized S&P Global Composite and Services PMIs. However, these will likely play second fiddle to the ISM survey-based stats.

On Thursday, initial jobless claims will also draw interest. An unexpected jump in jobless claims would ease the fear of further Fed rate hikes.

For the EUR:

It’s a relatively busy week for the EUR.

German trade data and service PMI numbers for member states and the Eurozone will move the dial on Monday. Barring a slide in Germany’s trade surplus, Italy and the Eurozone’s PMIs will likely have more impact.

Mid-week, the German economy is in the spotlight, with factory orders and industrial production in focus. Following disappointing numbers for March, further declines would fuel recessionary fears.

The third estimate of Eurozone GDP numbers will wrap up the week on Thursday. However, barring revisions from the second estimates, the numbers should have a limited impact on the EUR.

Beyond the numbers, investors should also consider ECB commentary. Executive Board members Luis de Guindos (Wed/Fri), Fabio Panetta (Wed), Edouard Fernandez-Bollo (Wed), Andrea Enria (Fri), and ECB President Christine Lagarde (Mon) are on the calendar to speak.

For the Pound:

It is a busier week ahead for the Pound. Finalized service and composite PMI numbers for May will draw interest on Monday. Revisions to the services PMI will provide direction.

On Tuesday, BRC Retail Sales Monitor numbers for May will also influence.

Other stats include construction PMI and house price data that should have a limited impact on the Pound.

With the economic calendar on the light side, Bank of England commentary will influence. However, no Monetary Policy Committee members are on the calendar to speak, leaving chatter with the media to provide direction.

For the Loonie:

It is a big week ahead on the economic calendar for the Loonie.

Ivey PMI numbers on Tuesday and labor productivity and trade data on Wednesday will draw interest ahead of employment numbers on Friday.

However, the Bank of Canada interest rate decision (Wed) will be the main event. The markets expect the BoC to stand pat, leaving the Rate Statement to move the dial. A dovish stance would catch investors by surprise as members will likely continue to raise concerns over inflation.

Out of Asia

For the Aussie Dollar:

It is a busy week for the Aussie Dollar. Company Gross Operating Profit figures for Q1 will give investors a snapshot of the corporate environment in Q1. Weak numbers would test buyer appetite.

GDP numbers for Q1 will also move the dial on Wednesday ahead of trade data on Thursday.

However, the RBA interest rate decision (Tues) will garner more interest. The markets expect the RBA to stand pat, leaving the Rate Statement to influence. In May, the RBA warned of more to come should inflation remain elevated. A hawkish rate statement would support the Aussie Dollar.

Other stats include housing and manufacturing sector numbers that should have a limited impact on the Aussie.

For the Kiwi Dollar:

For the Kiwi Dollar, it is another quiet week ahead. Business NZ PMI numbers will move the dial on Friday. We expect the sub-components to draw interest as the markets attempt to second-guess RBNZ’s next move.

For the Japanese Yen:

It is a busy week for the Japanese Yen.

Revisions to finalized services PMI numbers on Monday will draw interest. However, household spending figures on Tuesday and Q1 GDP numbers on Thursday would have more chance of forcing the Bank of Japan to shift away from its ultra-loose monetary policy stance.

Out of China

It could prove to be another influential week ahead. Caixin services and composite PMI numbers kickstart the week. A marked slowdown in service sector activity would weigh on riskier assets.

However, trade data on Wednesday and inflation numbers on Friday will likely have more impact.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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