Week Ahead after Debt deal saga

Investors are now focusing on the upcoming macroeconomic calendar following the successful passing of bipartisan legislation to lift the US government’s debt ceiling and prevent a possible default. Expected important economic indicators include the services PMI, international trade information, factory orders, and inventory levels. These announcements will offer insightful information on the state of many economies, affecting market sentiment and prospective policy choices. Let’s examine the upcoming activities and their possible effects. It is anticipated that the ISM survey for May would show strong service sector growth, possibly reaching its highest level in three months. Given the ongoing concerns about service-led inflation, the gauge used to measure price pressures is of special importance.

It is also anticipated that the Markit survey’s final estimate will confirm robust business activity growth, the strongest seen in more than a year. The trade deficit is expected to grow in April as a result of lower exports and higher imports. Positively, it is projected that manufacturing orders would increase for the second consecutive month.

NewsOTG gathered that the key interest rate of 4.5% is expected to remain unchanged when the Bank of Canada announces its monetary policy decision. Other significant economic indicators include the foreign trade statistics and Ivey PMI for Canada, the CPI statistics and consumer sentiment for Mexico, and the inflation rate and services PMI for Brazil. Market predictions point to a negative revision to the Euro Area’s preliminary estimate of Q1 GDP growth of 0.1%, pointing to the possibility of a second straight quarter of economic stagnation. While Germany’s industrial output is anticipated to rebound from a recent decrease, helped by stronger manufacturing orders, there are hopes for a comeback in retail sales for the Eurozone after declines in previous months. The trade balance for Germany and the inflation rates for Switzerland, Turkey, and Russia are additional disclosures. The latest Services PMI and Halifax house price index for the UK will also be widely watched. During its ninth meeting, the National Bank of Poland is expected to keep its benchmark reference rate at 6.75%.

As recent data have raised questions about earlier recovery estimates, China’s trade balance and inflation rate for May will provide additional insight into the country’s post-COVID economic performance. Investors in Japan are anticipating the April current account numbers. The Reserve Bank of India is also anticipated to hold interest rates steady for a second consecutive meeting, which will be followed by the announcement of April’s industrial and manufacturing output figures. Indonesia, the Philippines, and South Korea will all release their May inflation rates. The Reserve Bank of Australia is expected to keep its cash rate this time after an unexpected 25bps interest rate boost last month, maybe while watching for more developments in inflation. The first quarter GDP growth data for Australia as well as the April trade balance will then come under scrutiny. Market investors eagerly await the publication of key data that will shape investment choices and direct monetary policy outlooks as global economic events take place. Investors can acquire important insights into diverse economies and adjust their positions by attentively watching these movements. To successfully navigate the shifting environment of international marketplaces, stay educated.