The markets are surging higher this morning in the hopes of recovery and passage of the infrastructure bill. Global recovery expectations continue to firm while inflation worries have abated, for now. In the U.S., the employment report will highlight, an expected 700k surge underpinning recovery expectations.
Key Drivers for the Week of June 1, 2021
TIP – This is a 1-minute brief bullet-point summary. It is a tool that gives investors and financial a fast and simple list of what to watch for and talking points for the week.
- Data confirming global recovery gaining steam in most regions
- Holidays in U.S. and on Monday to thin trading
- U.S. nonfarm payroll report highlights, ISMs, vehicle sales due
- Fedspeak slate has Powell, Quarles, Brainard, Harker, Evans, Bostic, Kaplan
- Canada Q1 and monthly GDP, employment, industrial product prices, Ivey PMI
- Japan production retail sales, consumer confidence, housing starts, Q1 Capex
- China releases CFLP manufacturing PMI, Markit manufacturing and services PMIs
- Bank of India and RBA is seen keeping rates unchanged at 4% and 0.1%, respectively
- Eurozone unemployment rate, CPI, PPI, PMI, retail sales, M3 data due
- German jobless numbers, HICP, import prices, PMI slated
- UK reports lending and money supply data, manufacturing and services PMIs
- Switzerland Q1 GDP, manufacturing PMI
The dollar’s softening bias has remained in play, with the DXY USD index earlier pegging a six-day low at 89.72 while EUR-USD edged out a six-day high at 1.2241, despite the 10-year Treasury yield lifting back above 1.62%. The greenback has also seen four- and six-day lows against the Australian and New Zealand dollars, respectively.
In the U.S., there is another heavy slate of Fed speakers this week including Chair Powell, along with the release of the Beige Book for the June 15, 16 FOMC. Markets will be on guard for any hints that more policymakers are looking to start talking about tapering. However, nearly all have voiced desires to see more data and we suspect that will be the case this week, especially in front of the May jobs report, which will be released on Friday. For now, with inflation running notably higher than peers, and with the Fed remaining steadfast in its commitments to ZIRP and QE, the dollar should remain no a softening course.
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In Europe, data releases on employment in the Eurozone and Germany should continue to confirm the rebound, while inflation data continues to pick up. Asia’s calendar is busy, with key reports out of Japan and China that should maintain the upbeat outlook for China’s growth while highlighting the challenges faced by Japan amid the surge in infections.
Trading will pick up quickly today with a busy week instore, topped off by the May jobs report on Friday. Today’s slate includes the ISM manufacturing index for May, the Markit PMI, April construction sending, and the Dallas Fed index. There is also Fedspeak from Governors Quarles and Brainard.