We have an exciting week in store for the FX markets with major data announcements from the US, Eurozone, Australia and Canada topping the bill.
First up on Monday is US ISM Manufacturing PMI. The May figure is expected to print slightly higher than April’s at 49.8 vs 49.2. Above 50 shows US manufacturing is in expansion. Watch out also for ISM Manufacturing employment. An uptick in this number bodes well for Non-Farm Payrolls later in the week. On Tuesday German unemployment is set to remain at 5.9%.
Wednesday promises to be a spicy day. First up is Australian GDP with a Q1 (Y.o.Y) estimate of 1.2%. The US ADP employment change is forecast little changed at +180K for May. It is widely expected that Canadian interest rates will be cut to 4.75% (from 5%). ISM Services PMI may deliver a positive surprise as it jumps back in to the 50’s. (Analysts’ consensus is for a print of 50.5.) USDCAD may well be choppy around these data releases.
Thursday and it’s the turn of the European Central Bank and it appears that an interest rate cut of a quarter of 1 percent to 4.25% from 4.5% is priced in. The ECB press conference shortly after the announcement will reveal more as to the ECB’s thinking. EURGBP is probably the one to watch over this period.
On Friday morning Eurozone Q1 GDP (Y.o.Y- 3rd estimate) will be released. Expectations are for a reading of 0.4%. In the afternoon it’s USDCAD round two as both the US and Canadians reveal employment figures. US payrolls is expected at +180K with the unemployment rate steady at 3.9% and a slight shift higher for monthly average earnings. Canadian unemployment remains stubbornly above 6%. The headline number of new jobs was a large surprise higher in April so it is quite possible that May’s figure may be lower.
Good Luck and Good trading!
Ben Robson is Head of Institutional E-FX at Swiss Finance Corporation. He is also the Amazon Best Selling Author of Currency Kings – How Billion traders Made their Fortune Trading Forex. McGraw Hill 2017
