As we enter a busy week loaded with major data releases, traders are looking forward to more clues that the economy is on track to full recovery. After strong inflation data, US NFP data will be the top awaited data for the week. Employment data in Canada are scheduled for this week as well. The Reserve Bank of Australia will hold its policy meeting and no changes are expected for the moment.
NFP in the Spotlight
Employment data for May are scheduled on Friday and markets are expecting a big rebound from April’s weaker than expected numbers. The US economy is expected to add 670,000 jobs in May, almost tripling from 266,000 jobs added back in April. The unemployment rate is also expected to drop to 5.9% from 6.1%, while average earnings are forecast to have risen 0.2 percentage points over the month.
Reports showed that initial unemployment claims fell 38,000 to a seasonally adjusted 406,000 for the week ended May 22. That marked the fourth straight weekly decline, and the lowest since mid-March 2020.
Investors will be watching the ISM manufacturing and non-manufacturing PMIs. Growth for both sectors had eased from multi-decade highs in April but continued to point to strong growth. Readings for may are expected at 61.2 and 63.0 respectively.
Australian Dollar cautious for RBA meeting and Q1 GDP
Monetary policy was left unchanged in May, although the central bank is widely expected to review its yield curve control policy at the July meeting. In the time being, no significant changes are expected out of the upcoming monetary policy meeting. Rates to be kept unchanged at 0.10%. However, with the Australian economy recovering fast, maintaining such an aggressive bond buying programme will no longer be justified. So, little clues about tightening plans will be positive for the AUD.
Q1 GDP for Australia will also be released in the week on Wednesday. The national growth is seen at 1.1% QoQ in the first quarter, after growing by more than 3% for two consecutive quarters.
In its last meeting, The Reserve Bank expects the economy to grow faster and unemployment to keep falling further than it did just three months ago. Following its policy meeting on Tuesday, the Reserve Bank updated its key economic forecasts. Now GDP is expected to expand by 4.75 % this year and 3.5% over 2022.
Canadian GDP and Employment data
Another disappointing jobs data to shake the loonie this week. Market consensus is pointing to losing another 20.3K jobs in May, after a surprising loss of 207.1K jobs a month earlier. Unemployment is seen to tick higher to 8.2%. Q1 GDP on the other hand can show positive signs of economic performance. GDP is expected to print quarterly growth of 2.3% in the first quarter.
Join the forex market and start trading
Whether you are for the first time in forex trading or switching brokers, AximTrade provides the most competitive trading conditions with advanced execution technology. Choose now from various forex account types, based on your trading strategy, experience, and capital designed for investment. Learn how to open forex account with easy few steps and join the financial markets.