All eyes this weekend are on the French election. We have 2 candidates, the favourite of which is the centralist and Federalist Macron who is firmly behind the European Union although concedes it requires significant reforms. The reforms that Macron suggests would yield closer alignment with EU economic and political policy, which is very different from Le Pen. Previously the leader of the Right wing National Front party Le Pen has promised a referendum to stay in the European Union within the 1st 6 months of her taking the presidency, focused much of her campaign on nationalism and security, and could be considered very similar to Donald Trump in her rhetoric.
All expectations are that Macron will win comfortably, but we have heard that several times over the last 12 months. Should Le Pen succeed in taking the presidency then you could see significant economic and political turmoil across the Eurozone, without overstating, many people feel that a result like that would be the death knell of the single currency. So watch this space, the results will be due in around 7 p.m. on Sunday evening just before the Asian opening.
Sunday 7th May
All day | All currencies | The French Presidential
Macron is expected to win with around a 60% of the vote but should this not be the case there could be significant volatility on the Asian opening throughout the Sunday/Monday trading sessions.
Monday 8th May
Tentative | CNY | Trade balance – Prior: 164 billion | Expected 197 billion
Not expected to be a significant market mover but it is important to watch how China, as the world’s second-largest economy, is performing. Essentially a good release would increase confidence around the economic outlook whereas a miss could lead to concerns around imports and exports slowing which could have an impact on the global economy. There will be extra focus on this release due to the recent slide in commodity prices, so a weak result could push this further.
7 a.m. | EUR | Germany Factory Orders – Prior: 3.4% | Expected 0.7%
Not a huge market mover but is another figure to watch as we see signs of recovery across the Eurozone and approach possible monetary policy tightening.
Tuesday 9th May
2: 30 a.m. | AUD | Retail Sales – Prior: -0.1 | Expected 0.3%
After a disappointing result last month the RBA will be looking for ongoing signs of improvement around GDP and inflation. Retail sales are a good barometer of GDP.
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Wednesday 3rd May
9:30 a.m. | GBP | Construction PMI – Prior: 52.2 | Expected 52.1
Looking for another small slowdown in Construction PMI this month in the UK economy. Not anticipated to be a significant market mover but it is important to take into context with all of the other PMI is released to get an overview of sector by sector performance of the UK economy.
10 a.m. | EUR | Preliminary Flash GDP – Prior: 0.4% | Expected 0.5%
Again one of the big 3 releases, GDP being the overall output from the economy for Q1. With an improving picture across the Eurozone this will be an important figure to watch and could set sentiment for the coming few months. It also is likely to have an impact on the June ECB Policy meeting.
1:15 p.m. | USD | ADP Non-farm Employment Change – Prior: 263K | Expected 178K
Not anticipated to be a significant market mover but it is often a good precursor to the government released Non-farm Payrolls later in the week.
3 p.m. | USD | ISM Non-Manufacturing PMI – Prior: 55.2 | Expected 56.1
Last month we saw lower than expected numbers coming in at 55.2 against a predicted 57.1. We are expecting increase this month but much like others, if we see another sustained fall this could raise risks and questions around the US economy. Remember anything above 50 is expansionary.
7 p.m. | USD | Interest Rate Decision and FOMC statement – Prior: 1% | Expected 1%
With no press conference scheduled nor new economic projections it is extremely unlikely that there will be any change in interest rates. In addition, as we had an interest rate change at the previous meeting in March it would be extremely rare to have back to back changes unless data suggested it was required, which it doesn’t. The FOMC statement will be extremely important as the market will be looking for forward guidance for a potential June increase and beyond.
Thursday 4th May
9:30 a.m. | GBP | Services PMI – Prior: 55.0 | Expected 54.6
An important release for the UK as the services industry accounts for about 70% of the economy. We saw an improved position last month and expectations are for a slight slowdown this month, 54.6 is still a healthy expansionary figure.
5:30 p.m. | EUR | ECB President Speaks
Not expected to be directly linked to economic policy and therefore unlikely to be a market mover but we could see some short-term volatility depending on any references to monetary policy.
9:25 p.m. | CAD | Bank of Canada Governor speaks
This is an interesting speech as it is targeted at industrialists in Mexico. Normally I would anticipate very little reaction however with the recent trade dispute with the US and discussions about withdrawing from NAFTA we need to watch the content of this speech.
Friday 5th May
2:30 a.m. | AUD | RBA Monetary Policy Statement
This is important as it likely to set the tone for the Australian dollar over the next few weeks. While certain areas such as employment have improved there are still concerns around household debt and the housing market. We could see some rhetoric to try and jawbone the value of the currency.
4 a.m. | NZD | Inflation expectations – Prior: 1.9% | Expected —
Year-on-year inflation is now within the RBNZ target so this will be important to see what forward guidance they give around potentially increasing interest rates away from the all-time low that they currently are at.
1:30 p.m. | USD | Average Hourly Earnings – Prior: 0.2% | Expected 0.3%
Very important release to watch as the Fed look at this as a significant guide towards possible future inflation.
1:30 p.m. | USD | Non-farm Payrolls – Prior: 98K | Expected 194K
As ever the Main event for the 1st week of the month. After a significant miss last month, predominantly put down to seasonal adjustments, we are looking for a bounce back up this month. If we do not see a significant jump up this could start to have consequences for a June interest rate hike.
Source: Content written by Andi Thornton, TradingHUB Chief Analyst – www.TradingHUB.co.uk