Two interest rate moves are up for decision this week: US jobs data for May, Chinese trade data (also for May), and Australian economic growth for the first quarter.
Additionally, the start-of-the-month surveys of global manufacturing are underway. China’s official survey showed a surprise dip in manufacturing and service sector activity on Friday.
The Bank of Canada (Wednesday) and European Central Bank (Thursday) are expected to initiate their rate-cutting cycles this week, with both expected to trim their key policy rates by 0.25% following an easing in inflation – even if the EU rate rose to 2.6% in May from 2.4% in April.
Both central banks are likely to foreshadow further cautious easing ahead if inflation continues to fall as expected. Cuts this week will take Canada’s policy rate down to 4.75% and the ECB’s deposit rate to 3.75%, with its main refinancing rate at 4.25%.
The results of national elections in South Africa, Mexico, and India will be confirmed from today onwards. In South Africa, the African National Congress has been reduced to the largest minority party, which will have to form a coalition government if it wants to continue in power.
The result in South Africa makes it very unlikely that Anglo American will come back to the negotiating table with BHP for a while, if ever, especially if the ANC joins with a large left-wing party.
In the US, the focus will be on Friday’s jobs data with May payrolls expected to have risen by 180,000, unemployment expected to remain unchanged at 3.9%, and annual hourly wage growth likely to remain around 3.9%.
Job openings and quits data for April, expected to have shown a further slowing, will be released tomorrow. Meanwhile, the ISM manufacturing and services conditions indexes (due Monday and Wednesday respectively) are expected to have shown slight improvements over May, although the early report showed a surge to a two-year high last week.
For Australia, it's the March quarter national accounts and GDP. Forecasts range widely – from no growth for the quarter from the NAB to 0.2% to 0.3% at best from several other leading forecasters including Shane Oliver at the AMP. That could see annual growth at between 1% and 1.3% at best.
There’s also the 2024 national wage decision later today, as well as the March quarter’s current account figures tomorrow, along with business indicators and government finance data. The latter data feeds into the GDP numbers.
Monthly trade data for April will also be out this week, along with housing and personal finance figures from the Australian Bureau of Statistics. There’s also house price data for May.
Friday sees trade data for May released by China’s Customs Administration – a small improvement in exports is forecast, but imports are again expected to come in weaker.
