Inflation in the euro area and expectations of a new record

Bank of Canada tightening between 50 basis points and 75 basis points

US economy and NFP numbers by the end of the week

miscellaneous economic data

After many data such as the New Zealand Central Bank meeting, the US Federal Reserve minutes and PCE data, the events of last week, the markets are back again with other data, led by the monthly US labor market numbers, the Central Bank of Canada meeting, and many miscellaneous economic data that we will follow during the week.

We recall that the Central Bank of New Zealand raised interest rates last week by 50 basis points, as expected, the Reserve Bank of New Zealand raises interest rates and the New Zealand dollar rises (fayezalajmi-4x.com)

On the other hand, the minutes of the US Federal Reserve, in its meeting at the beginning of the month, issued in the middle of last week, confirmed that members support tightening monetary policy until they see clear signs of declining inflation.

We closed the week with the Fed’s PCE preferred inflation numbers, which came down in April, the Fed’s preferred inflation indicator fell in April and the dollar posted weekly losses (fayezalajmi-4x.com)

The general index of the US dollar recorded weekly declines and losses by about 1.40% by the end of the Friday session, and it is trading on Monday morning, the opening session of the week, with a loss of about 0.18% at 101.40 levels.

Inflation in the euro area and expectations of a new record

The European Statistical Office (Eurostat) will announce inflation figures for the eurozone tomorrow, Tuesday, as expectations indicate that inflation may rise to 7.7% in the initial reading for the month of May, setting a new record after 7.5% in the April reading, and that the core index, excluding food and energy prices, will remain at 3.5 % .

Any numbers that exceed expectations may push the central bank to move faster than expectations, and it is not excluded that we will witness some hints at the bank’s meeting in June.

Canadian Central Bank

The Central Bank of Canada is heading to raise interest rates by 50 basis points to reach 1.50% at its meeting next Wednesday for the second consecutive month at the same pace and for the third month in terms of raising interest rates with the continued rise in inflation.

The last reading of inflation from Canada came at its highest level since January 1991 at 6.8%, which is more than double compared to the bank’s target of 2-3%.

The statements of the Governor of the Central Bank of Canada Macleam in April supported the expectations of the markets to raise interest rates by 50 basis points, and did not rule out the possibility of even a slight increase by 75 basis points at the June meeting, especially since the Canadian economy depends mainly on commodities and with the continued rises of commodities from oil to aluminum and wheat, not We rule out that the bank will move with the maximum of its tools to curb the rise in inflation.

The Bank of Canada meeting is less than 24 hours ahead of the monthly growth figures from Canada, where GDP is estimated to grow 0.5% in April and grow by 5.2% qoq in the first quarter of the year, compared to 6.7% in the fourth quarter. from last year.

The Canadian dollar started pricing the hike by 50 basis points at a large rate, with its increases of more than 350 points from its highest levels in May against the US dollar, and accordingly, we are not expected to witness strong movements unless the move comes by 75 basis points, where until the moment expectations of this percentage do not exceed 25 Or the bank hinted at a continuation of the 50-point rate hike in the next meeting.

US employment numbers

At the end of the week Friday, as is the case on the first Friday of every Gregorian month, the US Department of Commerce announces the numbers of employment in the non-agricultural sector for the month of April, NFP, including unemployment rates and the level of wages.

Estimates indicate that the US economy may add 325,000 jobs in April (the economy added 428 thousand in February and March), with the unemployment rate dropping to 3.5% from 3.6% and the average monthly wage rising by 0.4%.

A negative reading that we are witnessing on Friday from employment numbers may negatively affect markets’ expectations of the continuation of the Fed’s tightening of monetary policy and may force the Fed to think about slowing the pace of tightening in the coming period, especially after the growth numbers last week and the high chances of an economic recession.

Miscellaneous data that we follow during the week

The United States of America, the largest economy in the world, will be on an official holiday today, Monday, on the occasion of the country’s celebrations of the anniversary, while we will follow the Spanish inflation figures and statements by US Federal Reserve member Wheeler in the American session.

Tomorrow, Tuesday, and in the Asian session, we will follow the unemployment data, Japanese retail sales, the manufacturing and services PMI from China, in the European period, the CPI inflation numbers will be released from the euro area, the growth numbers from Switzerland, the Canadian growth, the Chicago PMI index and the American consumer confidence, the most important events of the American session.

On Wednesday, Australia will announce growth figures in the Asian session, while the final reading of the manufacturing PMI for the eurozone, European unemployment rates and Lagarde’s statements, top the European session, the Canadian central bank meeting will be announced in the American session in addition to the ISM index issued by PMI and statements by US Fed members Williams and Pollard

Thursday Australia will announce the retail sales and trade balance in the Asian session, the UK will start the spring break on Thursday and Friday, in the American period we will monitor the weekly unemployment benefits in the USA in addition to the employment figures in the private sector ADP and factory orders.

Friday, the last session of the week, the US labor market data dominates