Next week will see the release of PMI manufacturing and services data for the US, Eurozone, the UK and China, as well as monetary policy decision by the European Central Bank, the Bank of England and the Reserve Bank of Australia.
Eurozone data is likely to dominate the week with the release of May’s final Markit manufacturing and services PMI for the bloc. Euro area PMI for manufacturing is out on Monday and services PMI is released on Wednesday. Individual PMI data for Germany and France will also be of interest as they’ve been lagging the rest of the Eurozone in recent months. German May flash CPI released on Monday and unemployment figures out on Tuesday will be followed by Euro area flash CPI data on Tuesday and unemployment data on Wednesday. Eurozone flash CPI is expected to come in at 0.1% in May year-on-year, up from 0% in April, moving further away from deflationary territory.
Retail sales for the Eurozone are also out on Wednesday, followed by final first quarter GDP data on Friday. No change is expected in the final GDP figures from the initial estimate of 0.4% quarter-on-quarter growth. Investors therefore will likely turn their attention to German factory orders and industrial production for April, which are due the same day. German industrial production is expected to expand by 0.5% in April from the previous month, down from 0.9% in March.
The European Central Bank will hold its scheduled monetary policy meeting on Wednesday where no change in rates or the asset purchase program is expected. However, ECB President Mario Draghi’s words will be closely scrutinized in the press conference as it’s likely to get dominated by questions on Greek default fears and the ECB’s liquidity support to Greek banks.
The Bank of England will also hold its monthly monetary policy meeting scheduled for Thursday. But as no change is expected, attention will be on UK manufacturing, services and construction PMI data for May, which are forecast to come in at 52.5, 59.5 and 55.0, respectively. Compared with April, the manufacturing and construction data would indicate an improvement, while services would remain unchanged.
The US will have another busy week as May unemployment, ISM Manufacturing and Non-manufacturing PMIs, trade balance and average hourly earnings figures are released alongside the final May Markit PMI data. Unemployment is expected to stay unchanged in May at 5.4% as jobless claims have been slightly higher than estimates in the past two weeks. Average earnings should remain muted with only a 0.2% rise expected for May, though this would be a small increase from April’s 0.1%. Weak earnings have allowed the Fed to maintain low interest rates while the labor market continues to tighten. Any sign of a pickup in labor costs would influence the Fed’s timing of a rate rise. The ISM Manufacturing PMI for May on Monday should show small improvement over April but Wednesday’s Non-manufacturing PMI is expected to deteriorate slightly.
Australia will also see some data releases with first quarter GDP data out on Wednesday and retail sales and trade figures on Thursday. First quarter GDP is expected to have expanded by 0.5% from the previous quarter. Before that though, the Reserve Bank of Australia will hold its rate setting meeting on Tuesday. Rates are expected to stay at 2% but further cuts are still a possibility so markets will be watching RBA’s statement closely for any clues on their next move.
In other data, Canadian May unemployment figures are out on Friday, China will see final PMI manufacturing data, and the Bank of Japan’s Governor Haruhiko Kuroda is due to speak on June 4 where markets will be wary of any comments on the current dollar/yen prices.