US Personal Income and Outlays Report will test investor bets on a September Fed rate cut.
Inflation figures from the Eurozone and Japan may influence the ECB and BoJ interest rate trajectories.
Economic data from China will impact market risk sentiment amidst hopes of an improving demand environment.
It was a more eventful week last week than anticipated, thanks to hotter PMI data across Europe and the US, serving as a reminder that inflationary pressures persist. This keeps the pressure on central banks to maintain higher interest rates. Consequently, traders will closely monitor flash CPI reports for Europe throughout the week, in the build-up to Friday’s PCE inflation report for the US.
Both reports have the potential to influence the timing of ECB or Fed rate cuts, if they occur at all.
A glance at the calendar reveals Australian retail sales and a monthly CPI report worth noting. If disappointing retail sales persist, it may support those calling for an RBA cut. However, this would need to be reinforced by softer inflation data on Wednesday, which notably exceeded expectations last month.
The US Dollar This Week
The US will release the revised GDP figures. They don’t tend to spark a large market reaction, but it will be duly noted if any of the growth figures are revised higher as it would be deemed inflationary (and bad for bearish USD bets).
US consumer confidence and house price figures will put the US dollar in focus on Tuesday (May 28). The CB Consumer Confidence figures will likely impact the US dollar more. Consumer confidence trends can dictate consumer spending and influence demand-driven inflationary pressures.
Q1 2024 GDP and jobless claims data will draw investor attention on Thursday (May 30). Unless there is a downward revision to the GDP figure, the jobless claims could influence the Fed rate path more. Tight labor market conditions may support wage growth and increase disposable income. Upward trends in disposable income could fuel consumer spending and demand-driven inflation.
On Friday (May 31), the all-important Personal Income and Outlays Report will attract investor attention. Steady Core PCE Price Index numbers and higher personal income/spending could fuel speculation about a Fed rate hike.
Eurozone Expectations
On Monday (May 27), the German Ifo Business Climate Index could influence buyer appetite for the EUR/USD. Recent economic indicators from Germany signaled an improving macroeconomic environment. An upward trend in the Index would support expectations of a pickup in economic activity.
Eurozone economic sentiment and unemployment numbers need consideration on Thursday (May 30). A steady unemployment rate and higher economic sentiment numbers could support buyer demand for the EUR.
The Pound & The BoE This Week
On Friday (May 31), UK house prices and mortgage lending figures could impact buyer demand for the Pound. However, the numbers will unlikely influence the Bank of England interest rate trajectory.
Bank of England commentary will warrant investor attention. Views on the timing of an interest rate cut will influence GBP/USD price trends.
The AUD in Focus
Retail sales figures will put the Aussie dollar and the RBA in focus on Tuesday. A pickup in retail sales may fuel demand-driven inflation and speculation about an RBA rate hike.
However, on Wednesday (May 29), the Australian Monthly CPI Indicator will likely impact the Aussie dollar more. Sticky inflation could influence the RBA interest rate trajectory.
Have your trading charts ready this week!
This Week’s High Impact Events
The times below are GMT +3.
Monday 27th May
No High Impact Events
Tuesday 28th May
17.00 – US – CB Consumer Confidence
Potential instruments to Trade: USD Crosses.
Wednesday 29th May
04.30 – Australia – CPI y/y
Potential instruments to Trade: AUD Crosses.
All -Day – Europe – German Prelim CPI m/m
Potential instruments to Trade: EUR Crosses.
Thursday 30th May
15.30 – US – Prelim GDP q/q, Unemployment Claims
Potential instruments to Trade: USD Crosses.
17.00 – US – Pending Home Sales m/m
Potential instruments to Trade: USD Crosses.
Friday 31st May
04.30 – China – Manufacturing PMI
Potential instruments to Trade: CNY Crosses.
15.30 – Canada – GDP m/m
Potential instruments to Trade: CAD Crosses.
15.30 – US – Core PCE Price Index m/m
Potential instruments to Trade: USD Crosses.
** Please note that on Sunday 2nd June, there are OPEC-JMMC, and OPECMeetings being held all day which could affect the markets. **
If you have any questions or require any assistance, please contact one of our support team members via our Live Chat or email [email protected].
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