U.S. Non-farm Payrolls Draw Attention, EU Inflation Data Highly Awaited
U.S. shares ended little changed on Friday but closed higher for the week. The Dow Jones Industrial Average inched 0.01 percent lower to 21,080.28, the S&P 500 added 0.03 percent to 2,415.82 while the Nasdaq Composite edged 0.08 percent higher, to 6,210.19. For the week, the Dow jumped 1.3 percent and the S&P 500 and the Nasdaq rose 1.4 percent and 2.1 percent, respectively.
The U.S. Bureau of Economic Analysis on Friday showed domestic economy grew at a 1.2 percent pace in the first quarter. The reading was in line with economists’ expectations and well above the 0.7 percent estimated earlier.
The dollar rose against a currency basket on Friday after the data was released with the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, up 0.2% to 97.33 late Friday after touching a one-week high of 97.47 earlier.
Financial markets the U.S. will be closed on Monday for Memorial Day. Coming back on Tuesday, the U.S. is to report on personal income and expenditure along with data on consumer confidence for April, which are all predicted to advance compared to the previous month on a monthly basis.
Data on pending home sales and business activity in the Chicago region will be released on Wednesday before ADP nonfarm payrolls report and the weekly report on initial jobless claims are published on Thursday. The Institute for Supply Management is to release its non-manufacturing PMI on the same day
In the week ahead, the U.S. Labor Department will release its May nonfarm payrolls report on Friday. Markets expect the data will point to a rise of 185,000 this month, following an increase of 211,000 in April. The jobless rate is anticipated to remain unchanged at 4.4%, while the average hourly earnings may have risen by 0.2% after gaining 0.3% a month earlier.
Turning to the Euro, the single currency was down 0.26% at 1.1182 on Friday. The euro zone will publish flash inflation figures for May on Wednesday amidst expectations that consumer prices will rise 1.5% this month, up from a gain of 1.9% in April. However, core prices are expected to increase 1.0%, easing from a rise of 1.2% in the prior month.
Before the release of the inflation data, European Central Bank President Mario Draghi is due to testify about the economy and monetary developments before the Economic and Monetary Affairs Committee, in Brussels, on Monday.
British Pound closed lower in three out of last five sessions and plunged sharply to one-month lows on Friday. The pair dropped 1.1% to 1.2798 after an opinion poll released on Thursday showed that the Labor Party narrowed the gap on the ruling Conservative Party.
The U.K. is scheduled to release readings on May manufacturing sector activity on Thursday, followed by a report on the construction sector on Friday. While the former is forecast to dip to 56.5 from 57.3 a month earlier, the latter is expected to weaken slightly to 52.7 from 53.1.
In China, the Federation of Logistics and Purchasing is to release data on May manufacturing sector activity on Wednesday with markets expecting a modest decline to 51.0 from 51.2 in the preceding month. On Thursday, the Caixin manufacturing index, which focuses more on small and mid-sized firms, is forecast to inch down to 50.1 from 50.3 a month earlier.
In Canada, economic growth figures will come out on Wednesday. The heading figure is expected to show that the economy expanded 0.2% in March after remaining unchanged a month earlier. If confirmed, the economy would grow at an annualized rate of 3.6%.
In addition to the GDP report, Canada will publish data on the current account and international trade.