The week ahead will some important economic releases that will no doubt fuel speculation for the upcoming central bank decisions in June.
Wage and price data will most likely influence the FOMC and the ECB meetings coming up later during the month. It will be an especially busy week in the US starting Thursday as the markets move into a new trading month.
ISM and NFP could cement rate hike expectations for June FOMC
The FOMC meeting is scheduled for June 13 – 14. Currently, the markets are pricing in an 80% chance of a rate hike in little under two weeks. However, these expectations could either make or break the rate hike expectations.
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The week ahead is relatively quiet from the US, but starting Thursday, fresh economic reports for the month of May begin to unfold, starting with the Institute of Supply Management (ISM) manufacturing PMI report.
The manufacturing activity has been on a backfoot after posting strong gains earlier this year. Median estimates expect that the manufacturing activity cooled even further, but falling to 54.7, which still signals an expansion in the sector. In April, the ISM manufacturing PMI was at 54.8.
On Friday, the monthly payrolls report will be released. Forecasts point to a recovery in the payrolls numbers with the average jobs seen rising 186k. This is slightly lower than April’s gains of 211k. However, wages continue to remain at the forefront.
Expectations are slightly hawkish with forecasts pointing to a year over year wage growth at the pace of 2.7%. The US unemployment rate is expected to stay put at 4.4%, same as in April when the unemployment rate fell from 4.5%.
Last but not the least, the Personal Consumption Expenditure (PCE) data is expected to slip from 1.8% in April to 1.7% in May, while the core PCE is expected to slide to 1.5% from 1.6% previously.
Read more: https://www.orbex.com/blog/2017/05/fx-week-ahead-u-s-payrolls-eurozone-flash-inflation-estimates/