Events to Look Out for Next Week

• Manufacturing PMI (CNY, GMT 01:00) – The NBS Manufacturing PMI is expected to slightly incline to 51.4 in May from 51.1, while the non-manufacturing PMI should decline.
• Harmonized Index of Consumer Prices (EUR, GMT 12:00) – The German HICP preliminary inflation for May is anticipated to slow down to 0.3% m/m from 0.7% with the headline at 2.0% y/y.

Tuesday – 01 June 2021

• Interest Rate Decision and Statement (AUD, GMT 04:30) – There have been speculations this week that the RBA will follow the RBNZ in staging a less dovish turn, although positioning in ASX interbank cash rate futures as of today were in fact indicating a 77% expectation of an interest rate decrease to 0.0% from 0.10% at next Tuesday’s RBA policy meeting. RBNZ’s monetary policy statement on Wednesday indicated a possible OCR hike by the end of 2022.
• Retail Sales and Unemployment (EUR, GMT 06:00 & 07:55) – German Retail Sales should contract to -0.3% y/y from 11% seen in March. Unemployment change for May is expected to contract to -10K from the 9K growth seen last month. Yesterday, Germany’s Q1 GDP report looked even weaker in the second reading than initially expected, although unlike the Eurozone overall, there wasn’t a technical recession and surveys indicate a rebound in the second quarter and further strengthening in Q3. The economy could reach pre-pandemic levels in the fall and against that background, the ECB’s ultra-generous monetary policy is increasingly looking out of synch with developments in the largest Eurozone economy.
• Manufacturing PMI (GBP, GMT 08:30)– The Manufacturing PMI for May is seen unchanged at 66.1.
• Consumer Price Index (EUR, GMT 09:00) –The prel. Euro Area CPI for May is anticipated to grow by 1.9% y/y from 1.6% y/y.
• Gross Domestic Product (CAD, GMT 12:30) – The final Gross Domestic Product for Q1, should grow to 7.5% q/q lower than 9.6% q/q. The slip in household spending bodes poorly for Q1, as restrictions likely bit early in the quarter which have left the door open to a small decline in Q1 GDP.
• ISM Manufacturing PMI (USD, GMT 14:00)– The ISM index is expected to rise 61.0 from 60.7 in April and an 18-year high of 64.7 in March, versus an 11-year low of 41.5 in April of 2020, and an all-time low of 30.3 in June of 1980.
• BoE’s Governor Bailey speech (GBP, GMT 15:00)

Wednesday – 02 June 2021

• Gross Domestic Product (AUD, GMT 01:30) – The final Gross Domestic Product for Q1 should slow down at 2.5% q/q and -1.8% y/y.

Thursday – 03 June 2021

• Trade Balance (AUD, GMT 01:30) – April’s Trade Balance for exports and imports are likely to show a pull back to 8 bln AUD from the 5.6 bln in March.
• ADP Employment Change (USD, GMT 12:15) – The key private payrolls number is expected to climb to 545K (a nearly 200k decline on last month’s 742K reading).
• ISM Services PMI (USD, GMT 14:00) – The key services data is expected to tick higher to 62.9 from 62.7 which would be another cycle high and move up from the 55.3 low in March.
• Inflation Report Hearings (GBP, GMT N/A) – The BOE Governor and several MPC members testify on inflation and the economic outlook before Parliament’s Treasury Committee.
• BoE’s Governor Bailey speech (GBP, GMT 16:00)

Friday – 04 June 2021

• Event of the Week – Non-Farm Payrolls (USD, GMT 12:30) – A 700k May nonfarm payroll increase is anticipated, after gains of 266k in April. We assume a jobless rate drop to 5.8% from 6.1% in April and 6.0% in March. Hours-worked are assumed to rise 0.5% after a 0.5% April increase, while the workweek ticks down to 34.9 from 35.0 in April. Average hourly earnings are assumed to be unchanged, as we further unwind the December distortion that left a 1.0% earnings surge with a big drop in low-wage workers. We expect a robust payroll trajectory in 2021 following the winter lull, thanks to stimulus deposits and vaccines.
• Labour Market Data (CAD, GMT 12:30) – Canada employment fell -207.1k in April after the 303.1k surge in March, leaving a decline that was a bit stronger than expected but well within the large forecast range for this release. The report revealed the roughly as-expected contraction in the labour market amid increased restrictions (Ontario was shut down, other regions were impacted) that came alongside a jump in infections during the month. Overall a return to labour market growth is forecasted later this year as vaccinations take hold and restrictions are eased.