Last week we saw the Dollar make gains across the board as the Greek tragedy continues to weigh on the Eurozone and its partners. Meanwhile, the US Dollar hit a fresh 13 year high against the Japanese Yen underlining it's advance. The first week of the month is always busy with key interest rate decisions and unemployment data from the US dominating the calendar. The OPEC meeting adds a little extra spice to potential price action.
A busy day to start the week off, with headline manufacturing and inflation data hitting the wires. The week starts with key manufacturing data released from Germany and the UK. Data in the UK in particular has been on the soft side, resulting in the market once again paring rate expectations. Crossing the pond, inflation data from the US is set for release in the form of the core PCE, whilst spending and manufacturing data is also due. In addition, Federal Reserve Deputy Chair Stanley Fischer is also due to deliver a speech titled "Lessons from the Financial Crisis", markets will keep a close eye for any clues on the next move in interest rates.
The main focus will be in the European markets. From Europe, the unemployment data from Spain and Germany is due along with the regions key inflation reading. Meanwhile from the UK, a keen eye will be on the PMI construction activity as we enter the summer.
The Eurozone will take centre stage today with the ECB press conference. No change is expected but it is the rhetoric that will be closely examined for clues on the ECB’s view on the economy and the effectiveness of QE. In addition, the market will also pay close attention to the UK services PMI (the dominant sector in the UK), the US ADP employment change (an early indicator on Non Farms) and US ISM non-manufacturing.
Despite the high tier event of the Bank of England rate decision it is the quietest day of the week. The BoE meeting is almost a foregone conclusion in terms of outcome, it will be the minutes that are released in two weeks time that will cause market volatility. Meanwhile the US weekly jobless claims is scheduled for release and will be heavily scrutinised ahead of the non farm payrolls on Friday.
A big day for the market on two fronts. Firstly the data will be key from the US with highly anticipated non farms payrolls and unemployment rate. This could be crucial in determining the FOMC’s decision on interest rate later in the month. In addition, the OPEC meeting which is held in Vienna and attended by representatives from 13 oil-rich nations will dominated headlines. OPEC nations represent around 40% of the world's oil supply and are unified in their oil production levels. Therefore, these discussions could determine the direction of the price of oil and in turn inflation; a necessary component for raising interest rates.