The Week Ahead: US Jobs Report, the Fed, China Stats, and Yen Intervention Chatter

The US Dollar

Employment cost numbers for Q1 2024 and the CB Consumer Confidence Index will be in focus on Tuesday (April 30). Upward trends in employment costs and consumer confidence could influence the Fed rate path. Higher wages and improving consumer sentiment would signal an uptick in consumer spending and demand-driven inflation.

On Wednesday (May 1), ADP nonfarm employment figures for April will warrant investor interest.

Tight labor market conditions support wage growth an increase disposable income. Upward trends in disposable income could fuel consumer spending. However, investors should also consider the JOLTs Job Openings Report. Higher job openings and quit rates would suggest a robust labor market environment.

Unit labor costs, nonfarm productivity, and jobless claims will put the US labor market in focus again on Thursday (May 2).

However, on Friday (May 3), average hourly earnings, nonfarm payrolls, and unemployment rate are the more influential labor market indicators. Beyond the labor market, the ISM Non-Manufacturing PMI also needs consideration. The services sector is a contributor to inflation. Input costs, employment, and new order trends will also move the dial.

In a busy week for the US dollar, the Fed interest rate decision and FOMC press conference (Wed) could be pivotal for the US dollar. The markets expect the Fed to leave interest rates at 5.50%, putting the press conference in the spotlight.

The EUR

On Monday, preliminary April inflation numbers from Germany will put the EUR/USD in focus. Softer-than-expected inflation figures could raise investor bets on a June ECB rate cut.

The French and German economies will be in focus on Tuesday. GDP numbers for France and Germany will draw investor interest. Moreover, GDP and inflation figures for the Eurozone will also warrant investor interest. The stats could influence speculation about multiple ECB rate cuts.

Finalized Manufacturing PMI numbers for France, Germany, and the Eurozone will garner investor interest on Thursday. Revisions to preliminary figures for April could move the dial.

Beyond the numbers, investors should monitor ECB chatter. Views on inflation, the economic outlook, and the timeline for interest rate cuts need consideration.

The Pound

On Wednesday, UK manufacturing sector PMI numbers will put the Pound in focus.

While the manufacturing sector accounts for less than 30% of the UK economy, the PMIs could reflect the demand environment. Downward revisions to the preliminary April survey could pressure the Pound.

UK house price trends could also move the dial. A continued decline in house prices could impact consumer confidence and spending. Downward trends in consumer spending may dampen demand-driven inflation.

On Friday, the all-important Services PMI will be in focus. An upward revision to the preliminary Services PMI could test investor bets on a Bank of England rate cut. The UK services sector accounts for over 70% of the UK economy and contributes to inflation.

Beyond the numbers, Bank of England speeches also need monitoring.

The Loonie

On Monday, GDP figures for March will put the Loonie in focus. A hotter-than-expected Canadian economy could impact investor expectations of a near-term Bank of Canada rate cut.

Canadian trade data for March will also warrant investor attention on Thursday. Improving trade terms would drive buyer demand for the Canadian dollar.

With the Canadian economy under scrutiny, investors should also monitor Bank of Canada chatter. BoC Governor Macklem and Senior Deputy Governor Rogers are on the calendar to speak on Thursday.

The Australian Dollar

Australian retail sales figures will impact buyer demand for the Aussie dollar. An upswing in retail sales could fuel demand-driven inflation and force the RBA into a more hawkish monetary policy stance.

Trade data will also draw investor interest on Thursday. Improving trade terms would support the Australian economy and the Aussie dollar.

Other stats include housing sector data. However, these will likely play second fiddle to the retail sales and trade data.

The Kiwi Dollar

On Wednesday, the RBNZ Financial Stability Report will impact buyer demand for the Kiwi dollar. RBNZ Governor Orr will also be in focus Wednesday. Views on inflation, the economy, and the interest rate trajectory need consideration.

The Japanese Yen

Industrial production, labor market, and retail sales figures for March could influence buyer appetite for the Japanese Yen on Tuesday. As the dust settles from the April 26 BoJ monetary policy decision, improving demand could signal an improving demand environment. A lower unemployment rate could support higher wages, household spending, and consumer price trends.

On Wednesday, consumer confidence figures for Japan could signal near-term household spending plans.

The Bank of Japan Monetary Policy Meeting Minutes will be in focus on Thursday. However, the markets may consider the BoJ minutes as dated.

Beyond the economic calendar, investors should monitor Japanese government threats to intervene and bolster the Yen.

Out of China

NBS Manufacturing and Non-Manufacturing PMI numbers will draw investor interest on Tuesday. However, the all-important Caixin Manufacturing (Tues) will likely influence market risk sentiment more.

The markets are facing fading hopes of a fiscal stimulus package from Beijing. The numbers will impact market risk sentiment and demand for commodity currencies. Commodity currencies include the Aussie dollar, the Kiwi dollar, and the Loonie.