After the debt deal saga, it will be a relatively quiet week in the United States, with only the ISM Services PMI, factory orders, and trade data of significant importance. Elsewhere, investors will be closely following monetary policy meetings in Australia, Canada, and India. Additionally, May inflation rates are set to be released in China, Brazil, Mexico, Turkey, Russia, Indonesia, the Philippines, and Switzerland. Other important releases include Q1 GDP growth rates for South Africa and Australia, as well as Services PMI readings for Brazil, China, Spain, and Italy. Finally, foreign trade data is anticipated in Australia, Canada, China, Germany, and France, while labor data will be released in Canada and retail sales figures in the Euro Area.
As the United States Senate successfully passed bipartisan legislation to raise the government’s debt ceiling, preventing a potentially disastrous default, attention now shifts to the upcoming macroeconomic calendar. Fresh figures are awaited for services PMI, foreign trade, factory orders, and inventory data. The ISM survey for May is expected to reveal a strengthening in service sector growth, reaching its highest level in three months. Investors will be particularly interested in the gauge that measures price pressures, as there are concerns about service-led inflation, which could influence central bankers to adopt a tightening bias. Additionally, the final estimate of the Markit survey is likely to confirm that business activity growth reached its highest point in over a year in May. Moreover, the trade deficit is expected to have widened in April due to a decline in exports and an increase in imports. On the other hand, factory orders are anticipated to rise for the second consecutive month during the same period.
Elsewhere in America, the Bank of Canada is scheduled to announce its monetary policy decision on Wednesday. Market expectations lean towards no change in the key interest rate, which is anticipated to remain at 4.5%. In addition, important economic data to watch for includes Canada’s foreign trade and Ivey PMI, Mexico’s CPI data and consumer morale, and Brazil’s inflation rate and services PMI.
In the Euro Area, market forecasts suggest a downward revision to a modest 0.1% Q1 GDP growth figure, indicating that the bloc’s economy failed to grow for a second consecutive quarter. Meanwhile, retail sales in the Eurozone are expected to rebound from declines in March and April, and Germany’s industrial activity is set to rise after experiencing its biggest drop in a year, aided by a recovery in factory orders. Other releases include Germany’s balance of trade, as well as the inflation rates of Switzerland, Turkey, and Russia. Additionally, the UK’s Halifax house price index and updated Services PMI will also be released. On the monetary policy front, the National Bank of Poland is expected to maintain its benchmark reference rate at 6.75% for the ninth meeting.
In China, the trade balance and inflation rate for May will offer more metrics on the country’s post-COVID performance, as recent data continues to undermine previous recovery expectations. In Japan, investors await the current account for April. Elsewhere, the Reserve Bank of India is expected to hold its interest rate steady for a second consecutive meeting before the MOSPI releases industrial and manufacturing output data for April. Meanwhile, South Korea, the Philippines, and Indonesia will publish inflation rates for May.
In Australia, the Reserve Bank is expected to hold its cash rate unchanged following last month’s unexpected 25bps hike, as policymakers may opt to wait and see inflation developments. This is followed by Australia’s GDP growth figures for the first quarter and the trade balance for April.