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Week Ahead – Another action-packed week


Will the recovery continue?

It’s likely to be another action-packed week despite numerous countries seeing it shortened by bank holidays. The jobs report is typically the highlight when it comes to the first week of the month but there will be competition from the OPEC+ meeting, Bank of Canada rate decision and inflation data.

We’ve seen a shift in markets over the last couple of weeks, with interest rate concerns being replaced by recession fears and then risk appetite improving after a challenging period. Can it be sustained?

There’ll be no shortage of central bank policymakers speaking over the next week which will naturally have a big role to play in the markets, as has been the case for much of the year. Can they keep investors happy or will they ruin the recovery?

US job creation expected to slow in May

ECB close to raising interest rates

Pressure easing on the BoJ as the yen strengthens


It will be a busy week filled with a wrath of economic data and central bank speak.  The majority of economic data is expected to show broad weakness.  Traders will pay close attention to the Conference Board consumer confidence reading on Tuesday which is expected to show a significant deceleration. On Wednesday, the ISM manufacturing report is expected to soften alongside a decline in prices paid. The main economic release will be the nonfarm payroll report. With many companies concerned about a deceleration in consumer spending, it will be important to see if hiring remains strong.  The consensus estimate for the change in nonfarm payrolls is 329,000 jobs, a decent dip from the 428,000 created in the prior month.  

Fed speak begins on Monday with the hawkish Waller as he discusses the economic outlook.  Wednesday is a busy day with the release of the Beige Book and remarks from the Fed’s Williams and Bullard.  On Thursday, the Fed’s Logan speaks at an event on Monetary Policy Implementation and Digital Innovation and Mester talks about the economic outlook.  On Friday, the Fed’s Brainard speaks at an event hosted by the Urban Institute.  

Speeches from ECB policymakers have become a lot more interesting in recent months as the central bank has gradually come around to the idea of abandoning its net asset purchases and negative interest rate policy. President Christine Lagarde laid out those plans clearly this week – a rate hike in July and September taking the deposit rate out of negative territory – in a highly unusual move. Others have since supported those views with some wanting more. Commentary will remain key.

A plethora of economic data from the eurozone will land next week, the highlight of which will naturally be the inflation data on Tuesday. We may soon see why the ECB felt the need to lay the groundwork for impending hikes. The individual country inflation data at the start of the week may provide clues as to what’s to come on Tuesday when the overall eurozone data is released. 


A shortened week for the UK thanks to the Jubilee bank holiday on Thursday and Friday. The rest of the week offers very little with tier two and three data being released on Tuesday and Wednesday.


This week, the CBR cut rates by another 300 basis points, taking the key rate to 11%. That’s only 1.5% above where it was prior to the invasion and 9% from the post-invasion peak. The move was done to arrest the appreciation in the rouble and has had some effect. But further rate cuts are likely, with many anticipating that the rouble will remain strong regardless of the central bank’s actions. It’s worth noting that the CBR is not waiting for scheduled meetings to cut rates so another could come before 10 June.

Lots of data next week as we start to see the economic ramifications of the decision to invade Ukraine.

South Africa

A number of economic releases are due next week including the whole economy PMI survey and unemployment. The central bank has been hiking aggressively recently and may not be done. 


Inflation data is the highlight next week but frankly, no one should care what it says at this point as the central bank certainly doesn’t. Maintaining that external factors are to blame rather than its misguided monetary policy, it’s clear that there will be no rate hikes any time soon, with households and businesses left to pay the price of President Erdogan’s warped ideology. 


China releases official PMIs on Tuesday and the Caixin Manufacturing PMI on Wednesday. There is downside risk to these numbers after recent soft data, and if the prints are weak, Chinese equities could face another sell-off.

China’s covid zero policy continues to dominate the economic outlook. Although Shanghai appears to be past the worst, Chinese markets remain vulnerable to spikes in cases in major cities leading to immediate movement restrictions. Any headlines along this line could weigh on local equities and also regional markets.

The PBOC appears to have capped the rise by USD/CNY for now via the fixing. China appears conflicted as to whether to allow more weakness to boost exports and weaker fixings this week can’t be ruled out. That could be a headwind for regional currencies as well.


India releases PMIs this week and Q4 GDP, however, markets could range trade ahead of the next RBI meeting on the 6-8 June where another rate hike is expected. Indian equity markets have moved to the lower end of their 2022 range, while the rupee has fallen to 2022 lows. Both remain vulnerable to swings in global risk sentiment. The US dollar retracement has passed the rupee by, suggesting more weakness may come.


Australia releases Q1 GDP on Wednesday and trade balance on Thursday. The trade balance will be closely watched to see if the Chinese slowdown is impacting Australia’s terms of trade which could be a negative for equities.

The Australian dollar has ridden the US dollar correction higher but despite data, elections, and monetary policy changes, the short-term direction of the currency continues to be dominated by the swings in risk sentiment day-to-day.

New Zealand

No significant data next week. Like the Australian dollar, the New Zealand dollar remains hostage to the daily swings we are seeing in investor risk sentiment from North American markets.

Japanese PMIs on Tuesday and Friday may cause only short-term volatility. The Nikkei continues to closely track the directional movements of the Nasdaq and S&P 500. Meanwhile, USD/JPY continues to be guided by movements in the US/Japan rate differential. There is potential for USD/JPY to have a culling of long positioning, but if the US 10 year yield moves back towards 3.0%, USD/JPY could just as easily be heading higher once more.


No significant data or events.

Economic Calendar

Monday, May 30

Economic Data/Events

EU leaders begin two-day special meeting in Brussels

Germany CPI

Eurozone economic confidence, consumer confidence

Thailand capacity utilization, manufacturing production index

Japan machine tool orders

Sweden GDP

Tuesday, May 31

Economic Data/Events

US Consumer Confidence

Eurozone CPI

France CPI

Poland CPI 

Canada GDP

Czech Republic GDP

India GDP

Switzerland GDP

Turkey GDP

Japan industrial production, unemployment

South Africa trade

Germany unemployment

Mexico reserves, unemployment 

Australia building approvals, BoP current account, consumer confidence

China PMI

Singapore money supply

India GDP, fiscal deficit, eight infrastructure industries

Thailand BoP, trade

Hong Kong budget balance, money supply

Japan retail sales, consumer confidence index, housing starts

New Zealand building permits, business confidence

Riksbank Governor Ingves speaks

ECB’s Makhlouf speaks

Bank of Italy releases annual report

Wednesday, June 1

Economic Data/Events

US construction spending, ISM manufacturing, light vehicle sales

Fed release Beige Book; also begins balance sheet runoff

Fed’s Williams speaks at Colombia University

Fed’s Bullard speaks

Australia trade, PMI

Eurozone PMI

Germany PMI


India PMI

Thailand PMI

Unemployment: Eurozone, Italy, Russia

Bank of Canada rate decision

New Zealand house prices

Hong Kong retail sales

Hungary GDP

Australia GDP, house prices

Thailand business sentiment index

China Caixin PMI

Japan capital spending, company profits, vehicle sales, Jibun Bank PMI

Russia industrial production

BOE’s Hauser is a panelist at NY Fed’s conference on monetary policy and digital innovation

BOE’s Decision Maker Panel survey results released

ECB’s Knot gives a keynote speech at the Bank of International Settlements’ “Green Swan” conference

PBOC Governor Yi Gang, ECB President Christine Lagarde and others speak about the green transition

Thursday, June 2

Economic Data/Events

US factory orders, durable goods, initial jobless claims

OPEC+ begins two-day meeting

Fed’s Mester speaks about the economic outlook

Riksbank Deputy Governor Jansson speaks

Eurozone PPI

Australia trade

New Zealand terms of trade index

Thailand forward contracts, foreign reserves

Singapore electronics sector index, PMI

Japan monetary base

Spain unemployment

EIA crude oil inventory report

Friday, June 3

Economic Data/Events

US May change in nonfarm payrolls: 329Ke v 428K prior, unemployment rate, average hourly earnings

Eurozone retail sales, Markit services PMI

France industrial production

Australia home loans value

Singapore retail sales, PMI

The UN’s Food and Agriculture Organization posts monthly food price index  

Sovereign Rating Updates

– Austria(Moody’s)

– France (Moody’s)

– Saudi Arabia (Moody’s) 

– Germany(DBRS)

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.

Craig Erlam

Craig Erlam

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  • Source: https://www.marketpulse.com/20220527/week-ahead-another-action-packed-week/

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