US ISM Services and US Jobs Report will likely dictate investor bets on a September Fed rate cut.
Private sector PMIs from the Euro area, a prelude to the ECB interest rate decision and press conference.
China PMI and trade data to influence market risk sentiment.
The European Central Bank and the Bank of Canada are widely expected to cut rates, the question is what happens in July. Plus, Dollar Tree is expected to show a rise in quarterly revenue.
The coming week in financial markets starting 3 June is centered on significant economic indicators and central bank decisions, particularly focusing on employment data. Key highlights include US non-farm payrolls, ECB and Bank of Canada rate decisions, and manufacturing PMIs from the US and China.
The discussion suggests that a strong US jobs report could influence the Federal Reserve’s rate decisions, potentially strengthening the US dollar. This week also has implications for global oil output and GDP data from Australia.
The US Dollar This Week
On Monday (June 3), the US ISM Manufacturing PMI will draw investor interest. A more marked contraction across the manufacturing sector could trigger fears of a US hard landing.
However, JOLTs Job Openings on Tuesday (June 4) and ADP nonfarm employment and ISM Services PMI figures on Wednesday (June 5) will likely impact the US dollar more.
Weaker labor market conditions and a more marked contraction across the services sector could raise bets on a September Fed rate cut.
Moreover, initial jobless claims also need consideration on Thursday (June 6).
However, on Friday (June 7), the US Jobs Report could be pivotal vis-à-vis the Fed rate path. A pickup in wage growth and a steady US unemployment rate could shift sentiment toward a September Fed rate cut.
There are no Fed speeches to consider. FOMC members entered the blackout period on Saturday (June 1).
Eurozone Expectations
On Monday (June 3), Manufacturing PMIs will put the EUR/USD under the spotlight. Upward revisions to preliminary figures for Germany and the Eurozone could drive buyer demand for the EUR.
However, on Wednesday (June 5), Services PMIs will likely impact the EUR/USD more. As a contributor to inflation, the services sector remains a focal point for the ECB. Upward trends in wages and input prices could test investor bets on post-June ECB rate cuts.
The main event will be the ECB monetary policy decision and press conference.
The markets are betting on a 25-basis point rate cut.
The CAD in Focus
On Wednesday (June 5), the Bank of Canada and the Loonie are in the spotlight. Labor productivity numbers could support investor bets on multiple 2024 BoC rate cuts.
However, the BoC monetary policy decision will impact the Loonie more. The markets expect the BoC to cut interest rates by 25 basis points. Barring a surprise BoC policy decision, the focus will be on the press conference. Suggestions of more interest rate hikes could impact buyer demand for the Canadian dollar.
15.30 – US – Average Hourly Earnings m/m, Non-Farm Employment Change, Unemployment Rate
Potential instruments to Trade: USD Crosses.
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