Week Ahead

Next week, the US jobs report will be in the spotlight, with markets forecasting a payroll decrease of 8.25 million while the unemployment rate is seen jumping to a record high of 19.7%. Other important releases for the US include ISM PMIs, trade balance and factory orders. Elsewhere, the Bank of Canada and the RBA will hold their monetary policy meetings although no changes are expected. Also, the ECB is seen keeping rates steady but will likely announce further stimulus. PMIs for China, the UK, Germany, Eurozone, Japan and GDP readings for Australia and Switzerland will also be watched.
Joana Taborda | joana.taborda@tradingeconomics.com 5/30/2020 12:50:47 PM
The US jobs report will be in the spotlight in the coming week, with markets predicting a payroll decrease of 8.25 million in May after a record 20.5 million decline last month as several states began to reopen their economies amid the coronavirus pandemic. The unemployment rate is expected to jump to 19.7 percent, the highest level on record, while wage growth should slow from an all-time high hit in April. Meanwhile, both the ISM Manufacturing and Non-Manufacturing PMI readings are likely to recover from 11-year lows reported in April. Other important publications are foreign trade balance, factory orders, construction spending, ADP employment change, and final readings of Markit PMIs and first-quarter nonfarm productivity.

Elsewhere in America, the Bank of Canada will probably hold interest rates at current levels when it meets on Wednesday. Key data to follow include Canada employment figures, trade balance, Ivey PMI and Markit Manufacturing PMI; Brazil industrial output and foreign trade; and Mexico business morale.

In the UK, final readings of Markit Manufacturing and Services PMI are expected to confirm ongoing weakness in those sectors despite recovery from a record low levels, while a preliminary figure for Construction PMI should also point to another month of sharp contraction in construction activity. Mortgage approvals, nationwide housing prices, new car sales and Bank of England’s monetary indicators will also be in the spotlight.  

Elsewhere in Europe, the ECB will deliver its latest monetary policy decision, with markets anticipating no changes in borrowing costs and a further stimulus announcement. The Eurozone, Germany and France will publish their final estimates of Markit PMIs while many other countries such as Spain and Italy will release flash readings. At the same time, job reports will be published for the Euro Area, Germany, Italy, Spain and Greece. Investors will also keep an eye on the Eurozone retail sales and producer prices; Germany factory orders and construction PMI; Spain consumer confidence and industrial production; Italy retail sales; Turkey inflation rate; and Switzerland Q1 GDP and retail sales.

Meanwhile, investors in China will turn their attention to PMI readings from both NBS and Caixin, with forecasts pointing to a slight recovery in factory activity as the country emerges from the coronavirus lockdown. In Japan, the Jibun Bank will be publishing its final PMI for May. Other key economic data for Japan include household spending and April’s preliminary estimate of leading economic index.

The Reserve Bank of Australia will hold its monetary policy meeting, but no changes are expected. On the economic data front, important releases for Australia include Q1 GDP, CommBank May’s final PMIs, Ai Group manufacturing index, trade balance, retail sales, HIA new home sales and building permits.

Other highlights for the Asia-Pacific region include: South Korea Q1 GDP and trade balance; Hong Kong retail sales; New Zealand building permits; India Markit PMIs; Philippines unemployment rate; and inflation rate for Thailand, Indonesia, South Korea and the Philippines.