What are the main events to look out for today?

Today is going to be the most interesting day of the week as we will get several market moving releases. I think the market is more focused on the growth side now as inflation continues to ease (albeit much more slowly) and the central banks are more inclined to cut rather than hike.Therefore, I would look at the data in such a context.

09:00 GMT Euro Area Indicator of Negotiated Wage Rates Q1 2024

This is the data that the ECB has been waiting for months to give it more confidence on the inflation
outlook. The data is unlikely to change their plan to deliver the first rate
cut in June since they telegraphed it so hard in the meantime that it would
be a real bad look to backtrack at this point. Nonetheless, it might shape
the market’s expectations for the number of rate cuts for the rest of the
year.

08:00 GMT Eurozone May Flash PMIs

The PMIs picked up notably since the start of the year as the prospects of monetary policy easing led to a positive growth impulse.The data is unlikely to change much for the market unless we see big surprises. Nonetheless, positive figures should support the growth narrative.

• Manufacturing PMI 46.2 expected vs. 45.7 prior.
• Services PMI 53.5 expected vs. 53.3 prior.
• Composite PMI 52.0 expected vs. 51.7 prior.

08:30 GMT UK May Flash PMIs

Same as for the Eurozone, the UK PMIs picked up strongly since the start of the year as we got a positive growth impulse from the expectations of central bank easing.

• Manufacturing PMI 49.5 expected and 49.1 prior.
• Services PMI 54.7 vs. 55.0 prior.
• Composite PMI 54.0 expected vs. 54.1 prior.

12:30 GMT (08:30 ET) US Jobless Claims

The US Jobless Claims
continue to be one of the most important releases to follow every week as it’s
a timelier indicator on the state of the labour market. This is because
disinflation to the Fed’s target is more likely with a weakening labour market.
A resilient labour
market though could make the achievement of the target more difficult.

Initial
Claims keep on hovering around cycle lows, while Continuing Claims remain firm
around the 1800K level. Today, Initial Claims are expected at 220K vs. 222K prior,
while there is no consensus for Continuing Claims
although the prior release showed an increase to 1794K vs. 1785K expected and
1781K prior.

13:45 GMT (11:45 ET) US May Flash PMIs

As it’s usually the case, the US PMIs will likely be the biggest market moving release today. Last month, the data surprised to the downside (although it was positively revised later) showing that the positive impulse in Q1 from rate cuts expectations faded a bit.

We got a few other data points missing expectations since then like NFP, Retail Sales, ISM PMIs, Jobless Claims (although still at cycle lows). Indeed, the Citi US Economic Surprise Index has been tumbling since peaking in April.

• Manufacturing PMI 50.0 expected vs. 50.0 prior.
• Services PMI 51.3 expected vs. 51.3 prior.
• Composite PMI 51.1 expected vs. 51.3 prior.

Central bank speakers for the day:

• 11:30 GMT (07:30 ET) BoE’s Pill (neutral – voter).
• 19:00 GMT (15:00 ET) Fed’s Bostic (hawk – voter).

This article was written by Giuseppe Dellamotta at www.forexlive.com.