The beginning of the upcoming week is looking to be a calm one as traders from the United States and UK are observing national holidays on Monday. However, the situation should become more dynamic later in the week, due to the publication of a number of interesting macroeconomic readings. The Reserve Bank of Australia will announce its monetary policy decision while the United States will publish the latest jobs data. Besides that several PMI readings from around the world will also be released. Be sure to watch US500, DE30 and AUDUSD next week!
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The S&P 500 (US500) managed to erase most of the recent losses and broke above the 4,210 pts mark this week. Solid employment data from the recent flash US PMI and declining number of weekly jobless claims suggest that the US labor market improved in May. However, now investors wonder whether solid momentum will be reflected in the Friday NFP report. After last month's negative surprise, the market expects a strong employment increase of 700k. Analysts also expect that the unemployment rate will decline to 5.9% from 6.1%.
Several Eurozone PMI readings will be released next week and this should provide a first look at the overall economic situation in the bloc in May. Of course, the most important as always are the readings from France and Germany, which will be published on Tuesday and Thursday. Earlier, on Monday, German investors will be offered preliminary CPI data for May. Analysts expect that inflation will remain relatively at the same level as last month, therefore any larger deviations from forecasts, could lead to larger price movements.
The RBA will hold a policy meeting next week and no major policy changes are expected. Still, investors will try to assess whether policymakers are willing to follow the RBNZ footsteps and take a more hawkish approach or will they continue to play down inflation concerns. Australia's GDP figures will also be released on Wednesday and may provide additional volatility.
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