With the economic landscape rapidly changing, next week should be an important one for investors and analysts to pay attention to. Germany and the euro area will release a number of important economic indicators. Simultaneously, the US will be releasing key jobs data, providing a wealth of information regarding economic development and market direction. Among standout releases are Germany’s Factory Orders, the HCOB Construction PMI and key US Nonfarm Payrolls and Unemployment Rate data.
A busy week of reports starts off with some key data expected to be released. On June 2, the final Jibun Bank Manufacturing PMI and the final S&P Global Manufacturing PMI will provide insights into manufacturing activities in Japan and globally. Further, Capital Spending figures will detail the picture for business investments. These indicators are key to understanding the long-term trajectories of economic growth.
On June 3, expect a blizzard of related reports to cascade. The JOLTS Job Openings report will show what people are hiring in the United States. At the same time, Factory Orders will show how much demand there is for newly manufactured goods. The new RCM/TIPP Economic Optimism Index will track consumer sentiment. The first Inflation Rate and Unemployment Rate in the euro bloc will be a valuable indicator of economic conditions in Europe.
Key Economic Reports from Germany and the Euro Area
On June 5, Germany will release its Factory Orders. This release, in conjunction with the HCOB Construction PMI, is a bellwether for understanding the country’s manufacturing and construction sectors’ health. Factory Orders are a good way to measure demand for goods nationwide, and the Construction PMI shows whether construction activity is growing or shrinking. These reports are a keenly observed bellwether by economists as they indicate trends that can significantly sway more macroeconomic performance.
Germany is due to submit its fourth and final reports on June 5. On that day, the euro area releases its HCOB Construction PMI and Producer Prices. The Producer Prices report provides important detail on inflation faced by producers. It provides an important early look at price trends that may ultimately affect consumers in the future. These initial releases will be very important in setting expectations. They’ll have a direct impact on the European Central Bank’s (ECB) monetary policy deliberations later this month.
On June 4, the final HCOB Services PMI for Germany and the euro area is out. This new publication will provide important perspective as to how the service sector is faring. This report provides a broader look of economic activity.
US Employment Data and Euro Area Economic Indicators
On June 6th, the United States will have the world’s full attention. It will be releasing its Nonfarm Payrolls and Unemployment Rate figures. As we’ve mentioned previously, these reports are essential for gauging the health of our labor market and overall economic performance. A robust jobs report could help shore up confidence in the new economic recovery. A downside surprise might reignite fears over growth potential.
Germany’s Balance of Trade figures will be released on June 6. The balance of trade is an important measure. It simply counts a nation’s exports and subtracts its imports to determine a country’s economic standing in worldwide trade. Coupled with this data, the euro area’s Retail Sales figures will provide further insight into consumer spending habits within the bloc.
The third and final Q1 GDP Growth Rate will be published on June 6. This quarterly update focuses on giving a snapshot of the economic performance in that first quarter of the calendar year. This figure is sorely lacking for policymakers and analysts. It provides further confirmation of this economic momentum as we move into the second quarter.
Anticipating Market Reactions
As these reports come out, market participants will be looking to further unpack the data. They will be watching for clues about whether the economy is getting stronger or weaker. The investor community is extremely hungry for clues regarding adjustments to the monetary policy. They are particularly interested in the policies of central banks in Europe and the United States.
Economic data released over the course of the week could move stock markets, bond yields and currency values. For instance, a strong employment report can help drive stock prices higher. Consumers’ confidence is key to investor confidence in consumer spending and strengthening economic growth. On the flip side, low-ish numbers would result in market jitters as fears of economic slowdown re-emerge.