The US dollar gained for the third week in a row
Markets are awaiting US labor market numbers
Higher expectations of monetary policy tightening from the Federal Reserve
Is the US debt ceiling crisis over?
Separate economic data
After the meeting of the Reserve Bank of New Zealand, inflation figures from the United Kingdom, the US Federal Reserve report, and inflation figures in consumer spending topped the events of last week, the financial markets return in a new week and new economic figures that will cast a shadow over the trading of the current week, topped by the US labor market numbers for the month of May and inflation figures from the eurozone In addition to some separate figures, before we go back to them, we will summarize the most important events of the past week.
At the beginning of the week, the Reserve Bank of New Zealand raised interest rates by 25 basis points, as expected. The Reserve Bank of New Zealand raises interest rates by 25 basis points (fayezalajmi-4x.com).
On the other hand, inflation rose in the United Kingdom, but it came higher than expectations in April. Inflation in the United Kingdom rose to 8.7% (fayezalajmi-4x.com).
The largest economy in the eurozone entered a period of technical recession, after declining by 0.3%. The German economy enters a stage of recession, and the euro is at its lowest level in two months (fayezalajmi-4x.com).
The Fed’s preferred inflation index, represented by US consumer spending, rose to 4.7% in April. The Fed’s preferred inflation index rose to 4.7% in April (fayezalajmi-4x.com).
The general index of the US dollar recorded gains of 1.20% last week, rising for the third week in a row, to conclude the weekly session at 104.13 levels, as the US dollar benefited last week from the high uncertainty in the markets due to the US debt ceiling crisis and the failure to reach an agreement, given that it is one of the most important currencies of haven. Security, in addition to rising expectations of the US Federal Reserve raising interest rates at its next meeting in mid-June.
Futures forecasts using CME’s FEDWatch tool now see interest rates raised by 25 basis points at the June meeting, by only about 64%, after they were below 20% levels early last week.
What will we watch this week?
Attention is directed during the sessions of this week to many economic data that will have a direct impact on currency movements, as the US labor market numbers for the month of May, inflation numbers from the eurozone and Australia, growth numbers from Canada and Switzerland, and the US manufacturing index top the events of this week.
USA Employment Numbers
During the closing session of the week, Friday, the markets are anticipating the most important events of the hot week, as the US Department of Labor is expected to announce the addition of approximately 180,000 jobs in May, compared to 253,000 jobs added in April, while the unemployment rate is expected to rise to 3.5% from 3.4%. While the wage level is expected to decline to 0.3% on a monthly basis from 0.5%.
ISM manufacturing numbers will also be announced next Thursday, as the manufacturing index is expected to continue contracting and below 50 levels, while the US consumer confidence index will be announced tomorrow, Tuesday, as it is expected to decline to 99.8 from 101.3 in May.
A number of members of the Open Market Committee will speak during the current week, as Parkin is expected to speak on Tuesday, followed by Collins and Bowman on Wednesday, while Harker will speak on Thursday, as the markets will follow the statements of the Fed members and their expectations for the next Fed meeting.
Eurozone and inflation figures
The most prominent events in the eurozone during the current week are the inflation figures that will be issued next Thursday, as inflation is expected to rise to 6.3% in May, according to the preliminary reading, compared to 7% in the April reading, while core inflation is expected to decline to 6.5%.
European Central Bank President Christine Lagarde will speak on Thursday moments after the release of inflation figures and markets will be watching for any hints regarding these numbers and her outlook for interest rates.
The Turkish lira is falling to record levels after the elections
The lira traded at its highest levels ever against the US dollar at the beginning of the session today, Monday, at 20.0650 levels, after the victory of the Justice Party candidate, Recep Tayyip Erdogan, in the presidential elections yesterday, Sunday.
The markets were expecting a surprise in the Turkish elections, and that a team would come up against the current team with regard to monetary policy, while some financial institutions warned of the continued decline of the Turkish lira, with expectations that the Turkish Central Bank would continue the current monetary policy.
The Turkish Central Bank follows a different policy from global central banks, as global central banks raise interest rates to curb inflation. The Turkish Central Bank lowers interest rates even with rising inflation, as the bank cut interest since last year by 550 basis points, with inflation rising to 85% before If it starts to slow down and reaches about 40%, will the bank change its policy under the current government, or will it continue its unconventional approach.
Risk appetite hostage to the vote of Congress
With the absence of European and American markets today on the occasion of the anniversary celebration in the United States of America and some banks in the euro zone on the occasion of the bank holiday, risk appetite is expected to rise in the markets tomorrow, Tuesday, after an agreement was reached between US President Joe Biden and House Speaker Kevin McCarthy yesterday, Sunday. Regarding the US debt ceiling to avoid default, it will be voted on by the House of Representatives next Wednesday.
The two parties will now try to get enough votes from the House of Representatives and the Senate to pass the agreement before the predetermined date of the fifth of June to avoid default.

Separate data that we follow during the week
Tuesday
Unemployment rate of Japan
Retail sales from Germany
Growing from Switzerland
Preliminary reading of inflation from France
US consumer confidence
Wednesday
Statements by the Governor of the Reserve Bank of Australia
Inflation from Australia
Inflation reading from Germany
growth from Canada
Vacancies and turnover rate
Thursday
eurozone inflation
jobs in the US private sector
US unemployment benefits
US manufacturing index
Crude oil stocks
Friday
Industrial production from France
Employment in the US non-farm sector
US unemployment rate