The week ahead: 2-6 June

A look ahead to the major events, economic releases and company news expected next week.

A person walking by a Sainsbury's branch
Source: Bloomberg

It’s all been about the European Central Bank this week, with even non-farm payrolls being less important than usual. Mario Draghi has certainly kicked off another surge higher, with the in-line NFP reading helping to make markets more bullish. The Germany 30 touched 10,000 for the first time, while the S&P 500 pushed on from 1900 towards 1950.

In commodities gold stabilised above $1240, but while it enjoyed an uplift in the wake of the ECB announcement it might struggle to push higher from here. Meanwhile, EUR/USD was able to bounce back from a slump during the ECB press conference, but as the week ends $1.3670 is acting as resistance for now.

Economic reports

Monday

Japan GDP (Q1, final), 12.50am: The final reading for Q1 Japanese GDP is forecast to drop to 1.4% from a previous reading of 1.5%. Market to watch: USD/JPY, Nikkei

Tuesday

China CPI (May), 2.30am: Price growth in the world’s second largest economy is expected to accelerate to 2.4% for the month, up from 1.8% a month earlier. Market to watch: AUD/USD, China A50

UK industrial and manufacturing production (April), 9.30am: Although not crucial for sterling, output from the UK’s industry will be a useful barometer of performance. Industrial production is expected to rebound with 0.4% growth from a drop of 0.1% in March, while manufacturing is also expected to increase, up from 3.3% to 4.1%. Market to watch: GBP/USD, EUR/GBP

Wednesday

UK unemployment (May), 9.30am: These readings are the crucial one for sterling this week. Jobless claims are forecast to drop by 25,000, from 25,100 in April, while growth in weekly earnings is expected to drop back from 1.7% to 1.2%, which could give the Labour party succor in its ‘Cost of Living’ campaign. Market to watch: GBP/USD, EUR/GBP

Thursday

Australian unemployment rate (May), 2.30am: Jobless numbers from Australia could be negative for the Aussie, as economists expect the rate to edge to 5.9% from 5.8%. Market to watch: AUD/USD, ASX 200

ECB monthly report (May), 9am: This regular update helps investors to gauge inflation expectations. Although the ECB has fired the gun on easing, quantitative easing could still be enacted if the bank thinks price growth will remain weak. Market to watch: EUR/USD

US retail sales (May), 1.30pm, initial jobless claims: US consumer spending, as measured by retail sales, should increase in May, up to 0.5% MoM (including cars and fuel) and 0.4% excluding cars and fuel, both of which would be a significant improvement over the lack of growth in April. Jobless claims hit 312,000 this week, up slightly, but the four-week moving average reached a seven-year low. Market to watch: Dow Jones, S&P 500, GBP/USD, EUR/USD, AUD/USD, USD/JPY

Friday

China retail sales (May), 6.30am, industrial production (May), 7am: Retail sales are expected to increase by 12.2% year-on-year, while industrial output is forecast to accelerate by 8.9% from 8.7% last month. Market to watch:AUD/USD, China A50, copper

German CPI (May, final), 7am: Price growth in the German powerhouse is forecast to remain at 0.9% in the final revision of the May figure. Market to watch: EUR/USD

Eurozone employment (Q1), 10am: The previous figure for the first quarter was a drop of 0.5%. Market to watch: EUR/USD

University of Michigan confidence index (June, first reading), 2.55pm: This gauge of US consumer confidence is expected to increase to 83 from 81.9 last month. Market to watch: Dow Jones, S&P 500, GBP/USD, EUR/USD, AUD/USD, USD/JPY

 

Company announcements

Monday

Hertz

Tuesday

Oxford Instruments

Wednesday

Sainsbury’s, Betfair, WH Smith

Thursday

Home RetailAtkins (W.S.)

 

After Tesco’s weak figures this week, the focus shifts to Sainsbury’s. Recent Kantar data was instructive, showing the problems the big four are enduring. WH Smith, which reached all-time highs in April, is now brushing the 200-day moving average, indicating it is ‘bounce or bust’ time for this company’s share price. 

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.