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Weekly Outlook, June 3-7: Monetary Policy Decisions & Nonfarm Payroll in the Limelight

Last week, the US-Sino trade wars continued ruling the scene and also Theresa May’s resignation was in the spotlight. Well, this week is going to be one of the busy ones as we have monetary policy decisions from the European Central Bank and Reserve Bank of Australia. Most importantly, the US economy is due to release the Non-farm payroll figures which, as you know, are one of the profoundly impacting and market-moving catalysts. Here the highlights for the next week.

Monday – June 3

Caixin Manufacturing PMI – 1:45 GMT
There is only one event on the economic calendar for China this week. However, it’s of absolute value and could affect quite a few currencies around the globe. In fact, It could impact not just currencies but commodities and equities as well. So it’s something to keep an eye on.

The figure that I’m referring to is Chinese Manufacturing PMI, which is expected to drop from 50.2 to 50. Well, considering the trade war and ongoing geopolitical tensions, the market is expecting PMI to miss the forecast.

Two Things to Know about This PMI Data

Threshold – Above 50.0 indicates industry expansion, below indicates contraction.
Actual release better than previous will be considered suitable for Chinese Yuan and Aussie.

ISM Manufacturing PMI – 14:00 GMT

The Institute of Supply Management (ISM) will release its latest manufacturing business survey outlook, also known as the ISM Manufacturing PMI at 14:00 GMT. Economists are expecting a slight surge in the figure from 52.8 to 53.0, which may keep the dollar supported on Monday.

Tuesday – June 4

Australian Dollar – AUD

Cash Rate – At 3:30 GMT, the RBA (Reserve Bank of Australia) will be releasing the interest rate. Considering the US-China trade war, the Australian economy is also suffering, which is why RBA is highly expected to cut the rates from 1.50% to 1.25%. That’s also because the central bank is concerned about growing household debt. Whereas, the wages are not rising as quickly as expected.

RBA Rate Statement – Since the rate is expected to change, investor focus also remains on the RBA rate statement. The rate statement will be worth watching for any future guidance. The monetary policy statement is among the primary tools the RBA Reserve Bank Board utilizes to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.

Wednesday- June 5

AUD – GDP q/q
At 1:30 GMT, the Australian Bureau of Statistics is due to release gross domestic product figures, showing a growth rate of 0.4% vs. 0.2% forecast. Well, once again, the US-China trade war seems to have an impact on the Australian growth rate, which is why half of the market sentiments remain bearish for the Australian GDP.

USD – ISM Non-Manufacturing PMI
The Institute for Supply Management is due to release services PMI figures at 14:00 GMT with a forecast of 55.6 vs. 55.5. For all the freshers, it’s a survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. The negative forecast may keep the US dollar in check.

Thursday – June 6

JPY – BOJ Gov Kuroda Speaks
The BOJ Governor Haruhiko Kuroda is Due to speak at the Institute of International Finance Spring Meeting, in Tokyo at 8:25 GMT. The volatility can be seen in the market as audience questions are also expected.

EUR – ECB Monetary Policy & Cash Rate
On Thursday, the European Central Bank will release its minimum bid rate at 11:45 GMT along with a press conference at 12:30 GMT. The ECB is widely expected to keep its interest rate unchanged at 0.00%. However, Draghi’s press conference could move the Euro. We need to see what Mario Draghi has to say about the bond-buying programs.

Friday – June 7

US Dollar – USD
Non-Farm Employment Change – The leading economic event is set to release on Friday at 12:30 GMT. After a substantial growth of 263k jobs, the US economy is expected to add only 180k jobs in May. Whereas, the Unemployment Rate is expected to remain unchanged at 3.6%. For sure, it’s not something exciting. Thus it may keep the dollar under pressure.

Canadian Dollar – CAD
Unemployment Rate – At 12:30 GMT, the Statistics Canada will be releasing the Canadian unemployment rate. It’s forecast to remain unchanged at 5.7%. Whereas, employment change is something in focus. Statistics Canada reported a surge in an Employment Change by 106.5k jobs in May.

Let’s see how this month treats the economy. Good luck for this week and stay tuned to FX Leaders for further updates!

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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