European session
On European trading day, we will release the UK employment report and interest rate decisions by the Swiss Central Bank and the Bank of England.
The UK employment report is expected to show 75,000 jobs added in the three months to April with the unemployment rate remaining unchanged at 5.0%. The latest report showed the unemployment rate rising with a significant fall in payrolls for April, although the ONS noted that early April estimates were more ambiguous due to the change in the tax year.
The Swiss Central Bank is expected to keep interest rates unchanged at 0%. There shouldn’t be anything new as the SNB has repeated countless times that the barrier to negative interest rates is still too high. The central bank is likely to continue to emphasize its “increasing readiness to intervene in the currency market” when necessary.
The Bank of England is expected to keep interest rates steady at 3.75% with a 7-2 vote. Recent economic data has been benign, with headline and core inflation measures coming in below estimates, and labor market data continuing to show weakness. However, the most significant development has been the end of the US-Iran war and the rapid decline in oil prices with Brent crude now trading below 80 per barrel, well below the 108 average per barrel in the Bank of England’s upbeat forecast. The central bank is likely to keep a discretionary option in the statement, but I think there is a good chance that the vote will err on the “dovish” side with the consensus.
American session
In the US session, we only have US unemployment claims data. Initial claims are expected to reach 225,000 versus 229,000 previously, while continuing claims are expected to reach 1,789,000 versus 1,795,000 previously. US jobs data has remained strong for several months, and the end of the war can only improve things further thanks to positive business and consumer sentiment. I don’t expect much reaction to the data unless we get significant deviations.
Central Bank spokesmen
- 07:00 GMT / 03:00 ET – ECB Nagel (hawkish votes)
- 07:00 GMT / 03:00 ET – ECB kosher (neutral – voter)
- 12:00 GMT / 08:00 ET – ECB’s Cipollone (neutral vote)
- 12:15 GMT / 08:15 ET – ECB Path (Neutral – Voter)
- 17:00 GMT / 13:00 ET – Escrivá from ECB (neutral vote)
This article was written by Giuseppe DellaMotta on Investinglive.com.
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