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The UK, US and the Eurozone in the week ahead

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  • US markets closed on Monday
  • UK closed on Thursday and Friday
  • US Non-Farm Payrolls on Friday

Monday 30th May

It’s a light start to the week in terms of economic data releases. Not only that, but we should expect trade to be quiet with the US markets closed for Memorial Day. We get an update on German and Spanish inflation in the form of their respective Consumer Price Indices (CPI).We also have the Swiss KOF Economic Barometer, German Import Prices, Canada’s Current Account and a speech from FOMC-voting member, Christopher Walller. Today’s major earnings come from Aldebaran Resources, Angus Gold, Weibo Corp, and Mesa Laboratories.

Tuesday 31st May

Tuesday’s economic data calendar is a lot busier than Monday’s. But it’s all second order releases suggesting that there’s little that is likely to be market moving. Kicking things off we have Japanese Retail Sales, Unemployment, Housing Starts, Consumer Confidence, and Industrial Production. From Australia we have Building Approvals, the Current Account, Private Sector Credit and Company Operating Profits. We also have Chinese Manufacturing and Non-Manufacturing PMIs. From the Euro zone we have Flash CPI along with German Retail Sales, and Unemployment. From France we have Consumer Spending, Preliminary CPI and Preliminary GDP. We also have the Swiss Trade Balance, GDP, and Retail Sales. From the UK we have M4 Money Supply, Mortgage Approvals, and Net Lending. In the afternoon we have Canadian GDP followed by a raft of US data including the Chicago PMI, Consumer Confidence, and the S&P/Case Shiller Composite 20-year House Price Index. Significant earnings reports come from American Superconductor Corp, HP Inc, Mind Technology and Salesforce Inc.

Wednesday 1st June

It’s another busy day for data with Japanese Capital Spending and Final Manufacturing PMI kicking things off. Then we have Australian GDP and Commodity Prices sandwiching China’s Caixin Manufacturing PMI. This has contracted for two consecutive months now as the ongoing coronavirus lockdowns crimp Chinese economic activity. Then we have Manufacturing PMIs from across the Euro zone, Switzerland, and the UK. We’ll also get an update on Euro zone unemployment while ECB President, Christine Lagarde takes part in a panel discussion on central banks and green transitioning. From the US we have the ISM Manufacturing PMI. This has been trending lower since the Spring of 2021, and the last two releases have come in well below expectations. Despite this the data is still above the 50.0 level which indicates ongoing expansion. But if we do see a further decline, then this will add to concerns that the US could be heading for a recession over the next year or so. In addition, there are updates on US JOLTS Job Openings, Construction Spending, ISM Manufacturing Prices and Total Vehicle Sales. We also have a rate decision from the Bank of Canada (BOC). A bigger-than-expected rise in inflation is putting more pressure on the central bank to raise rates once again. In April, the BOC took markets by surprise by raising rates by 50 basis-points (bps), twice as large as expected. The BOC’s Governor Tiff Macklem has said he wouldn’t rule out another rise of 50 bps. First quarter earnings reports come from Chewy Inc, Hewlett Packard, Semtech Corp, NetApp, and MongoDB.

Thursday 2nd June

Many Chinese markets will be closed in observance of the Dragon Boat Festival. UK markets will also enjoy the first of two Bank Holidays to celebrate the Queen’s Platinum Jubilee and Italian banks will be closed for National Day. But there’s still plenty of market activity. From Australia we have Retail Sales and the Trade Balance.  Turning to the energy sector, there’s the monthly OPEC-JMMC meetings where the outlook for the supply of, and demand for crude oil will be discussed by most of the world’s biggest producers. From Canada we have Building Permits and from the US we have Challenger Job Cuts, Weekly Jobless Claims, Factory Orders and Crude Oil Inventories. But the day’s most important number is the US ADP Non-Farm Employment Change. This is an update on private payrolls carried out by ADP and comes ahead of Friday’s official government Non-Farm Payroll (NFP) report. The ADP tends to be less volatile than the NFP, and while it’s a poor predictor of the official report it can occasionally offer a ‘heads-up’ if the numbers are significantly above or below expectations. However, last month’s ADP came in well below the consensus forecast while the official NFP report surprised to the upside. Thursday’s major earnings reports include Lululemon Athletica, Designer Brands, Broadcom, Hormel Foods, Canaccord Genuity, Ciena, Crowdstrike, and Tillys Inc.

Friday 3rd June

UK markets are once again closed to celebrate the Queen’s Platinum Jubilee. We have Germany’s Trade Balance and French Industrial Production. Then we have Services PMIs from across the Euro zone, the UK and later the US as well. We also have Euro zone Retail Sales. Finally, we have US Unemployment, Average Hourly Earnings and Non-Farm Payrolls. Last month’s release showed a payroll increase of 428,000. This was a touch better than expected, while unchanged from the prior month. The US Unemployment Rate currently stands at 3.6%, the lowest reading since before the pandemic in March 2020. This is good news for workers, although there are dangers that such low unemployment is adding to wage pressures which feed into inflation.

Have a good weekend.

David Morrison is an Analyst with Trade Nation. Trade Nation was set up with the specific remit to help customers realise their trading goals by changing the way they engage with the financial markets. As well as providing full transparency and making sure all customers get a fair deal, Trade Nation is fully regulated. This means customers can be confident they’re getting the trading experience they deserve. Visit www.tradenation.com to find out more

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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