Article by ForexTime
Important data to focus on:
US nonfarm payrolls: Friday
ECB meeting: Thursday
The non-farm payroll report that is due on Friday will give an indication of the US labour market and whether the economic recovery is on track. The latest jobs numbers will give more clues to whether the Fed will raise US interest rates at its June meeting. In April, the NFP data showed that the US economy created just 160,000 jobs, which was well below expectations and the weakest for seven months. But recently, Fed policy makers have become more bullish about the US economy after US retail sales surprised on the upside and inflation is starting to pick up.
The market’s focus will also be on the European Central Bank, which is scheduled to announce its latest monetary policy decision on Thursday. However, it is not expected to make any changes to policy at this meeting. The Eurozone economy appears to be recovering after recent data showed that GDP rose at the fastest pace in a year during the first quarter.
On Wednesday, final Eurozone PMI results are released for manufacturing and on Friday for the services sector. These will add some more insight into the Eurozone’s economic performance, and may affect expectations of whether the ECB will decide to add more stimulus later in the year. Business surveys so far have indicated that the Eurozone economy is stuck in a low-growth phase.
Eurozone inflation and unemployment numbers are also. The jobless rate fell to 10.2% in March and analysts will be hoping for it to fall below the 10.0% mark in coming months. Unemployment has been consistently above 10% since April 2011. Meanwhile, inflation is expected to remain low for longer, with the European Commission downgrading its inflation forecast for the region to just 0.2% for 2016 (down from 0.5% in February).
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PMI results will be eagerly awaited by UK policy makers to give better insight into the extent to which Brexit uncertainty might be hitting the economy. GDP growth has already slowed to a mere 0.4% in the first quarter of 2016. Business survey report indicated that some survey participants attribute the economic slowdown partly to Brexit uncertainty.
Article by ForexTime
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