BoC and OPEC+ meetings
The week will start with the holiday in the US and will end with its Non-farm payroll numbers on Friday. On the other hand, while the conflict between Ukraine and Russia increases market risk and energy prices, OPEC and its allies called OPEC+ members will get together on Wednesday and Thursday. Also, the Bank of Canada, on the first day of Jun, will start the Jun banking rallies to increase the interest rates. We also have many other data to watch in the week ahead, so stay with me to review the most important event and data.
1- China PMIs - Tuesday
Busy Tuesday will start with Chinese PMI data. These numbers will be the most up-to-date data about the Chinese economy and how they are confronted with the latest challenges. In April and then in May, China had some COVID lockdowns in Shanghai and other country areas, and these numbers should tell us more about the effects. Estimates are about to see both Service and Manufacturing index under 50 level, signaling contraction. These numbers should decrease the GDP numbers and put more pressure on the currency.
2- Eurozone CPI - Tuesday
After 7.4% in April, we expect to see the Eurozone inflation at about 7.7%. We expect these inflation trends to push the European Central Bank to begin raising interest rates in the July meeting with a 25 bps. Since higher inflation numbers increase this likelihood, it can increase the Euro rate against its crosses.
3- Canada GDP - Tuesday
Unlike the United States and many other economies, we expect to see substantial numbers in the Canadian GDP report, as it benefits from the Oil price increase. On the other hand, we know that inflation increases in Canada, the same in other economies. Therefore it will leave the central bank free to raise interest rates by another 50 bps at Wednesday's meeting. The Canadian Dollar should gain relative strength over its competitors.
4- US consumer Confidence - Tuesday
Moreover, this super busy Tuesday will end with the Conference Board's consumer confidence numbers in the US. Increasing inflation and a pessimistic outlook about the war fate in the US will be the main reason to put more pressure on consumers feeling. Market participants are waiting to see more weakness in the US consumer feelings. This number means that FED will be more cautious in its Hawkish policies. Therefore USD is expected to weaken.
5- OPEC+ Meeting - Wednesday & Thursday
OPEC Joint Ministerial Monitoring Committee meeting will be held with representatives from the 13 OPEC members and 11 other leading oil producers on Wednesday & Thursday. We are not expecting any changes in the current production plan, which would be positive for the Oil price and will stop the bears, even if it can not increase the price.
6- BoC meeting - Wednesday
June will start with the Bank of Canada's monetary policy meeting on Wednesday. Canadian inflation hit 6.8%, the highest rate since January 1991; the labor market has fully recovered from the pandemic, and GDP is positive unlike many other economies. Therefore, we expect another 50 bps rate hike to increase the BoC prime rate to 1.5%.
7- US labor market numbers - Friday
We had strong job creation in April despite some weakness seen in last week's initial jobless claims numbers. Therefore, we are waiting to see positive numbers in Friday's Non-Farm Payroll report and unemployment rates at 3.5%. Furthermore, average hourly earnings will rise by 0.4% in May. Overall data should be positive, and after weakness in the first days of the week in the US dollar index, we can see bulls again in the DXY chart and bears in the leading Wall Street indexes' charts.
