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A Week Ahead: May NFP, Bank of Canada and ECB Rate Decisions
Week in Review: Trump Taco, USD indecision and RBNZ Rate decision
This week was once again filled with tradable action in markets.
The week started off with closed US and UK markets, a broadly positive sentiment taking global indices higher in the beginning of the week with the Nikkei 225 leading the charge.
The US Dollar also started the week on a good note, although things have since changed with Wednesday evening Taco Trump headlines: The US Federal Court have cancelled the US President’s plan to impose record tariffs on key economic partners.
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A picture of the USD performance vs all majors, May 30. Source: TradingView
Indices all around the globe have finished the week green though off their highs. It was a week packed with earnings as we have observed releases for big names such as Nvidia, Dell and Costco who all beat their expectations.
The Nasdaq is beating all US Indices having enjoyed the earnings beats from NVDA and DELL. It is finishing the week up 1.96%
One of the themes that did not help to continue the good news was more uncertainty, as equity markets were on the road to return to their all-time highs though failed to do so.
In the currency space, the US dollar ended up leading—not by strength, but by being the least weak in a choppy week.
The Japanese yen took the biggest hit, following Monday evening remarks from Japan’s Finance Minister that triggered a notable drop in the currency.
We can’t forget the biggest headline, the previously mentioned Taco Trump.
This story refers to the U.S. Federal Court’s recent rejection of former President Donald Trump’s trade tariff policies. The court ruled that Trump had overstepped his authority when imposing certain import taxes.
This led to major swings in the Dollar Index as it seesawed above the 100.00 level, then came right back below. The index is closing around 99.40.
For commodities, Gold held around the $3,300 level and stays close to $200 below its all-time high. It seems that the market is awaiting for more news before taking a clear direction. The precious metal still finishes down 2% on the week.
Oil is down almost the same, with fears of higher supply. The price is still constrained between a 60.5 and 64 range.
Bitcoin on the other hand is down above 3.5% on the week, slightly rejecting the all-time highs though prices are still above the key mark of $100,000.
The Week Ahead: May NFP and Rate Decisions for the BoC and ECB
Next week is packed with key data compared to last week. We will see the release of high impact data from the US, China, Canada and Europe. This should be more fuel for volatility, especially if we see any data that provides more clarity on the impact of the most recent Trade Wars.
Asia Pacific Markets Outlook
The week won’t be as packed with data for the APAC compared to last week.
We will start off with Minutes from the last RBA Meeting to see if the Australian Central Bank confirms their dovish tone from the May 21 meeting – reminder that they have cut rates by 25 bps at that meeting taking their core policy rate to 3.85%.
We will also see the Caixin Manufacturing PMI Release from China, expected at 50.6, followed by the Services data on Wednesday 4th of June expected at 50.7.
We will observe how tariff menaces impacted the top global exporter.
Finally we are expecting the Australian release for PMIs and Import/Export data.
Do not forget the speech from the BoJ Governor Ueda at 3:50 AM E.T. during the night on Tuesday June 3rd.
Europe, US and UK Market Outlook
Expect a big week for European and North-American markets.
The week starts with PMI Data from Italy, Germany, Canada and the more market-moving US ISM Manufacturing, releasing on Monday June 2nd at 10:00 – Consensus is at 48.7.
Tuesday June 3rd will see the release of the Eurozone CPI which doesn’t tend to move markets too much as it is an aggregate of all European countries’ CPIs – it may although still impact EUR currency pairs.
Wednesday’s most important event will be the Bank of Canada Rate Decision at 9:30, expected to stay put- Rates are at 2.75%.
The Press conference at 10:30 might be more important though to monitor where Governor Macklem is standing regarding his views on the Canadian economy.
We will also have the US Services PMI Release expected at 52.
Thursday we will have the ECB Rate Decision, expected to cut by 25 bps to from 2.4% to 2.15% (Main Refinancing Operations Rate) though the decision is not unanimous. The decision will be out at 8:15 A.M E.T. on the 5th of June.
The rate decision will be followed by mid-tier data from Canada (Ivey PMIs) and the weekly Jobless Claims report.
And to conclude the week, for Friday June 6th, the biggest data will be the release of the US NFP report expected at 130K at 8:30, with the Canadian Jobs data released at the same time and being preceded by Europe Retail Sales at 5:00 E.T.
Most impactful Economic Calendar releases for Next Week
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For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)
Safe Trades for the week ahead!
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