Weekly Outlook, May 4-8: Top 5 Economic Events to Watch This Week
Arslan Butt • 2 min read
Good morning, traders.
The US dollar continues to be stronger despite weak manufacturing PMI figures. Final Manufacturing PMI was released at 18:45 GMT on Friday, which showed a contraction in the manufacturing activities during April. The actual value came in as 36.1 against the expected 36.9 and weighed on the US dollar.
The US Manufacturing activity dropped to an 11-year low level in April due to the affected supply chain amid coronavirus pandemic. This weakened the US dollar across the board and aided in the upward movement of GOLD prices on the starting day of the month.
This week, all eyes will remain on the Nonfarm payroll figures from the US, Australian Cash Rate, UK Monetary policy decision, and Canadian labor market figures. Let’s take a more in-depth look.
Top Five Economic Events to Watch This Week
Markit’s forward-looking purchasing managers’ index for Spain’s production division has been in consolidation mode for nine of the past ten months, and the bias is anticipated to continue in April, with an estimation of 35.0 points. In Italy, the PMI is anticipated to slow down to 30.3 points.
- Eurozone Manufacturing PMI – 7:15 GMT for Spain
- Eurozone Manufacturing PMI – 7:45 GMT for Italy
- Eurozone Manufacturing PMI at 7:50 GMT for France
- Eurozone Manufacturing PMI at 7:55 GMT for Germany
The German indicator has been in recession since December 2018 and is anticipated to drop to 34.4 points. The Eurozone PMI slipped to 44.5, its weakest delivery since 2012. The estimate for April stands at 33.6 points. France slipped to 43.2, and the forecast reaches 31.5 points.
At the April meeting, the RBA kept the cash rate at 0.25%. No development is anticipated at the forthcoming meeting. However, it will be exciting to observe the stance of the bank in the rate statement, given the explicit economic decline in the wake of Corvid-19.
The Institute for Supply Management will bee releasing the US services PMI figures at 17:00 GMT. The PMI has been in the positive region since 2009, with figures over the 50 mark, but analysts are bracing for a distinctive decrease in April, with a forecast of 37.5 points.
The Bank of England is anticipated to maintain the standard bank rate of 0.10%, which the bank lowered from 0.25% in March. Traders will be keeping a close look at the monetary policy review, which may include information on future monetary moves.
The US NFP (Nonfarm Employment Change) and the unemployment rate will remain under the spotlight. Both these economic data sets will be monitored at 12:30 GMT. NFP is expected to drop dramatically to -21000 vs. -701K during the previous month.
Whereas the unemployment rate is also expected to dip sharply to 16.0% vs. 4.4% in the past and the Average Hourly Earnings are expected to rise by 0.3% vs. 0.4% previously. The weaker data will offer an opportunity to short the Greenback for a quick 60-100 pips and vice versa.
That’s all for now, but stay tuned to our economic calendar for live market updates and forex trading signals.