It’s a new month, which means it’s time for me to tell you about the major financial events to look out for in the next 4 weeks.
The first major release of the month takes place on May 6 with the US NFP report on the number of new jobs added in April. Last month’s data came in slightly above forecasts at 215,000. The jobless rate also edged up slightly as more people came into the workforce. Expect more good signs in April.
China takes centre stage in the second week of May. The Chinese government will release critical information on trade, inflation, retail sales and industrial production. These figures showed signs of improvement in March.
In the same week, the Bank of England will release its Quarterly Inflation Report alongside its interest rate decision. The Inflation Report is used by traders to assess UK inflation over the short-term.
Friday, May 13 also features Q1 GDP data for Germany and the Eurozone. Economic growth in the Eurozone appears to have remained stable in Q1, although inflation remains negligible.
The 3rd week of May holds several major market moving events to look out for.
Inflation data for the US, UK and Eurozone will be released throughout the week, giving traders more information about the performance of each respective economy.
The biggest data release will take place early in the week when Japan reports on first quarter GDP. Japan’s economy contracted in the fourth quarter and another contraction in Q1 would confirm a recession for the world’s 3rd largest economy.
In monetary policy, the Australian RBA and US FOMC will release the minutes of their latest policy meetings on Tuesday 18 and Wednesday 19, respectively.
Central bank developments continue on 25 May when the Bank of Canada issues a rate statement. The BOC will probably keep interest rates unchanged in light of the recent rebound in oil prices.
GDP data will once again make headlines in the final week of May. This time, the United Kingdom and United States will report on first quarter growth.
The US GDP report in particular can have a big impact on the market. Analysts believe that US GDP growth could have slowed to a low of 0.2% year-over-year in Q1. A weak reading likely spells bad news for the US dollar.
We are still keeping a close eye on precious metals and energy. Silver prices have been on a bullish streak since the start of April, outpacing the performance of gold. Since silver is a byproduct of base metal mining, expect the grey metal to respond to Chinese data. After all, China is the biggest consumer of base metals in the world.
And oil? The market has experienced a huge bounce since mid-February. How high it will go will depend on investor sentiment. Investors seem pretty confident that the market is rebalancing, but analysts at major banks like Goldman Sachs aren’t too sure. To get a better sense of short term movements in oil, monitor the weekly EIA inventory reports and the Baker Hughes rig count data. Also keep an eye out for any news out of OPEC.