The economic calendar for the week ahead is relatively quiet with most of the reports scheduled around Thursday and Friday. With the start of a new trading month, the U.S. nonfarm payrolls report is scheduled for release covering the month of May.
Besides the U.S. payrolls report, the ISM manufacturing PMI and the ADP private payrolls report will also be released. Elsewhere, the BoC will be holding its monetary policy meeting during the week. No changes are expected to the BoC’s interest rates which are currently at 1.25%.
So with the BoC and Eurozone Inflation in our sights; Here’s a quick recap of the economic events for the week ahead.
BoC Rate hike and Canada GDP
A busy week is in store for the Canadian dollar with the Bank of Canada’s interest rate decision looming followed by the month GDP figures.
The Bank of Canada will be meeting this week on Wednesday, May 30. According to the economists polled, the wide market consensus is that the BoC will keep interest rates on hold at this month’s meeting.
However, there is still a good chance that the Bank of Canada will hike rates. This comes following mixed signals which showed that inflation was rising at a steady trend reaching beyond the BoC’s 2% inflation target rate. On the other hand, the recent monthly jobs report showed that the Canadian labor market performed poorly in the month of April.
Still, many rate watchers speculate that the Bank of Canada would hike interest rates at least two more times through the course of this year, if not at today’s meeting.
With some certainty developing on the NAFTA deals as well, it is likely that the BoC will bide its time before the next rate hike. The odds for a rate hike remain mixed heading into this week’s BoC event which could bring about some volatility to the Canadian dollar.
Later in the week, the Canadian monthly GDP figures will also be coming out. Forecasts point to a 0.4% increase in the GDP on a quarterly basis which is expected to push the annual GDP growth rate to 1.7%.
Eurozone flash inflation estimates expected to fall
Data from the Eurozone is relatively light with only the preliminary inflation reports from Germany and consumer spending data from France. Later in the week, France will also be releasing its preliminary quarterly GDP report.
The Eurozone flash inflation estimates are due on Thursday. Forecasts point that the Eurozone inflation was steady at 1.2% while core CPI is forecast to fall further to 0.7%.
U.S. Nonfarm payrolls & ISM manufacturing PMI
Alongside the BoC and Eurozone Inflation, the week ahead ends with a busy Friday, with a lot of important data coming out from the United States. On Wednesday, the ADP’s private payrolls report will be released. The report covers the monthly figures for the month of May and will culminate into Friday’s official nonfarm payrolls report.
The U.S. unemployment rate is expected to remain steady at 3.9% but the total number of jobs added to the economy is forecast to rise 164k on the month. This marks a slower pace if increase compare to 185k increase seen the month before.
Wage growth is tipped to rise 0.1% on the month or 2.6% on the year, marking a steady trend in wages. Ahead of the payrolls report, the U.S consumer spending and income reports will also be coming out. Consumer spending is forecast to rise 0.4% on the month, slightly up from 0.3% last month. Consumer income is expected to rise at a steady pace of 0.3%.
Finally, the ISM’s manufacturing PMI is expect to slip to 57.3 which marks a slower pace of increase compared to 58.3 seen the month before.