A relatively uneventful week ahead of us regarding both macroeconomic news and earnings announcements, although the 49th meeting of the Joint Ministerial Monitoring Committee of the OPEC countries will take place on Sunday, June 4, potentially affecting oil prices.
Monday 05.06. 08:30 GMT, UK Composite Purchasing Managers' Index (May)
The Purchasing Managers' Index (PMI) provides an early indication of economic activity in the economy, as purchasing managers are considered to have first-hand information on the performance of their companies. The composite PMI combines data from both the manufacturing and services sectors. A reading above 50 indicates expansion, while a reading below 50 indicates contraction in both sectors combined.
The upcoming reading will either confirm or change the preliminary data released on May 23. While the initial forecast for the composite PMI was 54.6, the preliminary data came in worse than expected at 53.9, changing the forecast for the upcoming final data accordingly. Although worse than expected, the UK composite PMI has been back in expansionary territory since February this year.
Source: Tradingeconomics.com
Higher-than-expected reading may have a bullish effect on the GBP, while a lower-than-expected reading could be bearish for the GBP.
Impact: GBP
Thursday 08.06. 09:00 GMT, Eurozone Gross Domestic Product (GDP) QoQ (1Q final)
Gross domestic product (GDP) indicates the total value of goods and services produced in a country (or a currency union in this case) for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy is weaker than expected.
Preliminary data for the first quarter of 2023 showed that the Eurozone's quarterly economic growth was at a modest 0.1%, following a stagnant fourth quarter. Several factors may have significantly affected the union's economy, including a noticeable rise in consumer prices fueled by higher energy and food expenses. Furthermore, the European Central Bank's aggressive tightening of monetary policy has intensified the economic strain and decreased confidence levels among businesses and consumers. Among the largest economies in the Eurozone, Germany and the Netherlands slipped into recession in the first quarter of 2023. However, France, Italy, and Spain did witness some expansion during the same period.
Source: Tradingeconomics.com
Higher-than-expected reading may have a bullish effect on the EUR, while a lower-than-expected reading could be bearish for the EUR.
Impact: EUR
Friday 09.06. 01:30 GMT, China Consumer Price Index (CPI) YoY (May)
The Consumer Price Index (CPI) measures changes in the prices of products and services from the consumer's point of view. It can be used to monitor trends in purchasing power and inflation, which is essential for many aspects of the economy. The CPI reflects the price of a basket of goods and services most commonly purchased by households. This basket usually includes food, housing, health care, transport, and entertainment. Governments and central banks constantly monitor CPI values as they allow them to understand what price changes are taking place in the market and how they affect household budgets.
In April 2023, China experienced a decline in its CPI reading, dropping from 0.7% in the previous month to 0.1%. This figure fell short of market expectations of 0.4%. It marked the lowest recorded rate since February 2021, when deflation was observed. This decrease in inflation comes in the context of an uneven economic recovery following the elimination of a zero-COVID policy. During this period, prices for both food and non-food items continued to ease. The upcoming CPI reading for May is expected to be 0.4% - the same level as last month's forecast.
Source: Tradingeconomics.com
Higher-than-expected data could be bullish for the CNY. Conversely, weaker-than-expected data could be bearish for the CNY.
Impact: CNY
Stocks to watch
JM Smucker (SJM) announcing its earnings results for the quarter ending on 04/2023. Forecast EPS: 2.41. Positive earnings surprise in 10 out of the last 10 reports. Time: Tuesday, June 6, before the market opens.
Brown Forman (BFb) announcing its earnings results for the quarter ending on 04/2023. Forecast EPS: 0.4275. Positive earnings surprise in 5 out of the last 10 reports. Time: Wednesday, June 7, before the market opens.
Campbell Soup (CPB) announcing its earnings results for the quarter ending on 04/2023. Forecast EPS: 0.6493. Positive earnings surprise in 8 out of the last 10 reports. Time: Wednesday, June 7, before the market opens.
Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service)
Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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