On Monday 3rd: Chinese Caixin Manufacturing PMI and American ISM Manufacturing PMI
On Tuesday 4th: American JOLTs Job Openings
On Wednesday 5th: Australian GDP Growth Rate QoQ, Canadian BoC Interest Rate Decision and American ISM Services PMI
On Thursday 6th: Australian Balance of Trade, European ECB Interest Rate Decision and Canadian Ivey PMI
On Friday 7th: Chinese, German and Canadian Balance of Trade, Canadian Unemployment Rate, American Non Farm Payrolls and American Unemployment Rate
Monday 3rd of June
China's manufacturing sector continued to expand in April 2024, marking the sixth consecutive month of growth. The Caixin China General Manufacturing PMI rose to 51.4, exceeding the previous month's reading of 51.1. Last month’s increase is also the fastest pace of expansion since February 2023. With a keen eye on the sector's health, market participants eagerly await the release of the May Caixin China Manufacturing PMI, scheduled for 1:45 AM GMT. This upcoming data point will provide valuable insights into the current state and potential future trajectory of China's manufacturing industry.
The US manufacturing sector took a step back in April 2024, with the ISM Manufacturing PMI dipping to 49.2 from the previous month's reading of 50.3. This marks a contraction in activity, dashing hopes of sustained growth after the first expansion in 16 months observed in March. Traders will be closely watching the release of the May ISM Manufacturing PMI data at 2:00 PM GMT, hoping for a rebound and a return to expansion territory above 50.
Tuesday 4th of June
The US job market showed signs of cooling in March 2024, with the number of job openings declining by 325,000 to 8.488 million. This represents the lowest level since February 2021, suggesting a shift from the torrid pace of hiring witnessed earlier. Market analysts are anticipating a further decrease in job openings for April during the release of the American JOLTs Job Openings data scheduled for 2:00 PM GMT.
Major Earnings Releases:
● Ferguson PLC
● Hewlett Packard Enterprise Co
Wednesday 5th of June
Australia's economic growth showed signs of moderation in the fourth quarter of 2023. The GDP expanded by 0.2% compared to the previous quarter, marking the ninth consecutive period of growth. However, this increase was the weakest in five quarters, indicating a potential slowdown. Market analysts are eager to see if this trend continues. They'll be closely watching the release of the Australian GDP Growth Rate for the first quarter of 2024, scheduled for 1:30 AM GMT when they expect the GDP to have increased by 0.3%.
The Bank of Canada (BoC) opted to hold its key interest rate steady at 5% in April, as most market participants anticipated. This decision came despite some signs of easing inflation. While central bank officials acknowledged a decrease in price pressures across various goods and services since their last meeting, they highlighted ongoing concerns.
The uncertain global economic climate and higher-than-expected commodity prices were cited as obstacles to a smoother decline in inflation. Governor Macklem emphasised that recent data, although indicating some progress, didn't yet justify looser monetary policy. The BoC anticipates inflation to hover around 3% through the first half of 2024, only reaching its target of 2% in 2025.
However, recent data pointing to robust global economic growth led policymakers to consider stronger domestic output. The BoC currently projects a GDP expansion of 1.5% for 2024 and 2.2% for 2025. Given this economic backdrop and ongoing inflation concerns, market participants expect the BoC to maintain interest rates at 5% when the next decision is announced at 1:45 PM GMT.
The US services sector, a long-time engine of economic growth, took a surprising turn in April 2024. The ISM Services PMI plunged to 49.4, signifying a contraction for the first time since December 2022. This marks only the second decline in activity since the pandemic's peak in the second quarter of 2020.
This shift coincides with the unexpected contraction observed in the manufacturing sector, raising concerns that the Federal Reserve's interest rate hikes might be impacting business conditions more significantly than anticipated. Traders are looking ahead to the release of the May ISM Services PMI data at 2:00 PM GMT, hoping for a rebound in growth territory at 52.
Major Earnings Releases:
● Dollar Tree Inc
Thursday 6th of June
Australia's trade surplus narrowed significantly in March 2024, raising concerns about the health of the export sector. The surplus dipped to AUD 5.02 billion, down from a downwardly revised AUD 6.59 billion in February. This marks the smallest surplus since November 2020, highlighting a concerning trend. While exports continued to grow, the pace was much slower compared to imports. This imbalance is cause for close monitoring by market analysts. They'll be keenly watching the release of the Australian Balance of Trade data for April, scheduled for 1:30 AM GMT to know whether the narrowing surplus is a temporary blip or a sign of a more persistent trend.
The European Central Bank (ECB) voted to hold interest rates steady at their record-high levels in April, marking the fifth consecutive month of no change. This decision comes despite some signs of easing inflation.
While acknowledging a decline in headline inflation and moderation in underlying price pressures and wage growth, the ECB remains cautious. They highlight persistent domestic price pressures, particularly strong inflation within the service sector. President Lagarde emphasised a data-driven approach to future policy decisions, rejecting any pre-commitment to a specific rate path.
However, some ECB officials, including Governor Rehn of Finland and chief economist Lane, have hinted at the possibility of rate cuts as early as June. This has fueled market expectations, with participants anticipating a reduction to 4.25% when the next interest rate decision is announced at 12:15 PM GMT.
Canada's manufacturing sector continued its impressive growth trajectory in April 2024. The Ivey Purchasing Managers Index (PMI) jumped to 63, marking the highest level in two years and the ninth consecutive month of expansion. This significant rise from 57.5 in March signifies strong momentum within the sector.
Market participants expect a slight decrease in the Ivey PMI, anticipating it to settle at 61 when the data is released at 2:00 PM GMT. This suggests a potential moderation in the growth pace, although the overall outlook for Canadian manufacturing remains positive.
Friday 7th of June
China's trade surplus narrowed significantly in April 2024, raising concerns about the health of its export sector, as exports experienced a much slower growth compared to imports. The surplus dropped to USD 72.35 billion, down from USD 86.46 billion in the same month a year prior. Market analysts are closely monitoring this data to detect any trend when the May Chinese Balance of Trade statistic is published at 3:00 AM GMT.
Germany's trade sector continued to show positive signs in March 2024. The country's trade surplus climbed to EUR 22.3 billion, exceeding the previous month's figure of EUR 21.4 billion. This positive trend is attributed to a stronger increase in exports compared to imports. Looking at the bigger picture, Germany recorded a cumulative surplus of EUR 70.5 billion for the first quarter of 2024. Market participants remain optimistic about the future of German trade. Their expectations point towards a further increase in the surplus, with forecasts suggesting a figure of EUR 22.6 billion when the April Balance of Trade data is released at 6:00 AM GMT.
Canada's trade performance took a turn in March 2024, with the country slipping into a deficit of CAD 2.3 billion. This marked a significant shift from the previous month's surplus of CAD 0.5 billion and represented the first trade gap since December of the prior year. The deficit was also the largest since June 2023.
Market participants expect the Canadian Balance of Trade for April to increase to CAD 0.9 billion when the data is released at 12:30 PM GMT.
Canada's unemployment rate held steady at 6.1% in April 2024, maintaining the two-year high reached in March. This news comes with mixed signals for the job market. While some may interpret it as a sign of stability, others might be concerned about the lack of improvement.
Analysts expect the Canadian Unemployment Rate for May to remain unchanged at 6.1% when the data is released at 12:30 PM GMT.
The US job market showed signs of a slowdown in April 2024. The economy added 175,000 jobs, a significant drop from the upwardly revised figure of 315,000 in March and falling short of market expectations for a 243,000 increase. Unsurprisingly, market participants have adjusted their expectations for May. They now predict 151,000 new jobs to be created when the data is released at 12:30 PM GMT.
Adding to the concerns, the unemployment rate inched up to 3.9% in April, exceeding market expectations of no change from the previous month's 3.8%. Despite this slight increase, market participants forecast the unemployment rate to hold steady at 3.9% in May.
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