As mid-May quickly approaches, economic insiders and market observers alike prepare for a deluge of key data releases. These figures can be powerful forces in disrupting financial markets. May 15 is becoming an exciting and pivotal day on both sides of the Atlantic. Three major reports are scheduled to come out soon that could shed new light on economic conditions. Including labor market conditions, consumer inflation expectations, and most up to date production indices.
Next week is going to be very important for the U.S. It will be important for AUD and JPY, as they will both be releasing key economic data. Analysts anticipate that these figures will provide insights into consumer behavior, production capacity, and overall economic health as central banks navigate their monetary policies.
Key Data Releases in the United States
On May 15, the United States will be hit with an avalanche of economic data that has the potential to drastically alter market sentiment. Labor market numbers and consumer inflation expectations—released in the New York Fed’s survey of consumer inflation expectations—will be two of the most-watched reports. These gauges are important due to the broader lens they provide on the labor market and where consumers are at with their expectations of inflationary pressure.
In addition to labor statistics, there are a few other key reports of Note being released that same day. Coming retail sales figures will shed more light on the shifts in consumer spending. At the same time, producer prices will show where inflation is coming from up the supply chain. The Philly Fed Manufacturing Index Manufacturing activity in the Philadelphia region is one of the first indicators published for the month and can provide clues about wider industrial trends.
Industrial and manufacturing production data indicate what manufacturers are making. This kind of hard data is important for judging the underlying robustness of our economy. Business inventories will be released too, giving an indication of how businesses are or aren’t keeping up with changing consumer demand and managing inventories appropriately. Finally, the NAHB Housing Market Index will gauge builder confidence in the housing sector. This dynamic sector is the growing backbone of our economy.
International Economic Updates
Though all eyes are focused on the United States, international markets are preparing for some key data releases. In the UK, on May 13, the BRC Retail Sales Monitor and labor market figures will be published, providing valuable insights into consumer behavior and employment conditions.
On May 15, that’s when the preliminary Q1 GDP Growth Rate will be released. Here’s what this report should tell us about the UK’s economic performance in Q1. These numbers are very important to policymakers, as they look forward to growth paths and calibrate monetary policies in response.
In Australia, two significant reports will emerge on May 13: the Westpac Consumer Confidence survey and NAB Business Confidence index. Each of these two surveys is intended to be a gauge of consumer sentiment and business outlook, respectively. All of these indicators can have an outsized influence on economic forecasts and market moves.
Japan’s Current Account data will be released on May 12. This data, in particular, is critical to understanding Japan’s trade balance and capital flows. These variables immediately affect currency value and the general economic well-being.
Market Reactions and Currency Fluctuations
After reaching a high of 114.78 last Monday, DXY finished the week on a very soft note. Nonetheless, it still managed to win its third straight weekly increase, closing above the key psychological barrier of 100.00. Such a performance is a testament to a resilient dollar in the face of wildly volatile market conditions—notably as investors get ready for Friday’s key non-farm payroll data.
Market reactions will be quick after the reports come out, especially if the reports differ from analysts’ projections. Meanwhile, a better-than-expected jobs report would further shore up confidence in the resilience of the U.S. economy. A positive surprise on the inflation expectations front would likely further strengthen the dollar.
Negative surprises can increase volatility in the financial markets. Traders will lower their estimation of the Federal Reserve’s likely moves on interest rates going forward. The interplay between these economic indicators and market sentiment will be closely observed as investors look for cues regarding monetary policy direction.