In a market environment filled with uncertainty caused by the threat of contagion from the EU sovereign debt virus, the trading week ahead will bring a series of crucial economic data from major industrialized nations around the globe, culminating with one of the main gauges of the state of recovery in the world's largest economy: the U.S. Non-Farm Payrolls and Employment Situation report.
In preparation for the new trading week, here is a quick look at the most important economic events that every currency trader should pay attention to during the trading week ahead (Note: All times Eastern).
Sunday, May 2 will begin the trading session with significant economic releases from "Down Under", starting with the Australian Manufacturing PMI (Purchasing Managers' Index), a leading indicator of economic conditions measuring the activity level of purchasing managers in the manufacturing sector, at 7:30 p.m.
Another notable report, the Australian TD Securities Melbourne Institute Inflation Gauge, a measure of consumer inflation used as a leading monthly indicator of the quarterly-issued Consumer Price Index, will be released at 8:30 p.m. This will be followed by the Australian House Price Index, a leading indicator of housing market activity measuring changes in home prices, at 9:30 p.m.
Monday, May 3 will start with the Swiss Composite PMI (Purchasing Managers' Index), measuring the activity level of purchasing managers in the manufacturing and service sectors, at 3:30 a.m.
The Euro-zone Manufacturing PMI (Purchasing Managers' Index), a leading indicator of economic conditions measuring the activity of purchasing managers in the manufacturing sector, will follow at 4:00 a.m.
The U.S. economic data will bring the first spotlight event of the week: the U.S. Personal Income and Outlays, a measure of the income received and purchases made by consumers, released at 8:30 a.m. At the same time comes the Personal Consumption and Expenditures Deflator, a leading indicator of inflation preferred by the Fed because it measures a variable basket of goods and services, as opposed to the CPI (Consumer Price Index), which measures a fixed basket of goods and services.
Personal income is expected to increase by 0.2% m/m along with the consumer spending rising by 0.6% m/m from 0.3% m/m. The core PCE inflation gauge may show a slight increase in inflationary pressures by 0.1% m/m compared with the previous month.
Another spotlight event, the U.S. ISM Manufacturing Index, a leading indicator of industrial activity, where a reading above or below 50 is the dividing line between economic expansion and contraction, will come at 10:00 a.m., along with the U.S. Construction Spending.
Consensus forecasts point to a flat reading of 59.6% for the U.S. ISM Manufacturing Index in March, same as it was in February.
The day's reports will end with the New Zealand Labor Cost Index, a gauge of inflation in wages, at 6:45 p.m.
Tuesday, May 4 will start with one of the main spotlight events of the week: the Reserve Bank of Australia Interest Rate Announcement, at 12:30 a.m.
A sequence of notable U.K. reports will include the U.K. Manufacturing PMI (Purchasing Managers' Index), a leading indicator of economic conditions measuring the activity of purchasing managers in the manufacturing sector, at 4:30 a.m., the Bank of England's Mortgage Approvals Report, a leading indicator of housing market activity measuring newly issued home loans, at 4:30 a.m., and the U.K. Net Lending to Individuals, a gauge of consumer credit conditions, also at 4:30 a.m.
The Euro-zone PPI (Producer Price Index), the main measure of wholesale inflation experienced by manufacturers and a leading indicator of consumer inflation, will follow at 5:00 a.m.
The U.S. economic data will bring the U.S. Factory Orders, a leading indicator of economic activity measuring orders placed with domestic manufacturers, at 10:00 a.m., along with the U.S. Pending Home Sales, a leading indicators of housing market activity.
The day will conclude with a series of important economic reports, beginning with the U.K. Nationwide Consumer Confidence Index, a survey of consumers' financial conditions and outlook on the economy, at 7:00 p.m., and the British Retail Consortium Shop Price Index of changes in prices of goods, also at 7:00 p.m.
The Australian Services PMI (Purchasing Managers' Index), a leading indicator of economic conditions measuring the activity of purchasing managers in the services sector, at 7:30 p.m., and the Australian Building Approvals, a leading indicator of housing market activity, at 9:30 p.m., will wrap up the day.
Wednesday, May 5 will begin with two notable releases: the Euro-zone Services PMI (Purchasing Managers' Index), a leading indicator of economic conditions measuring the activity of purchasing managers in the services sector, at 4:00 a.m., and the U.K. Construction PMI (Purchasing Managers' Index), measuring the level of activity of purchasing managers in the construction sector, at 4:30 a.m.
More European news will bring the Euro-zone Retail Sales, an important measure of consumer spending, at 5:00 a.m.
The U.S. economic reports will begin with a spotlight event: the ADP (Automatic Data Processing) Employment Report, an important gauge of labor market conditions in the private sector of the economy, at 8:15 a.m.
The private sector of the U.S. economy is expected to add up to 20,000 jobs compared with a loss of 23,000 jobs in the previous month.
Another spotlight event, the U.S. ISM Non-Manufacturing Index of economic activity in the services industries: agriculture, mining, construction, transportation, communications, wholesale trade and retail trade, will come at 10:00 a.m., followed by the EIA (Energy Information Administration) Weekly Oil Inventories, at 10:30 a.m.
The U.S. ISM Non-Manufacturing Index could show activity picking up to 56% in March from 55.4% in February.
Notable economic data from "Down Under" will begin with the New Zealand Employment Situation and Unemployment Rate, the main gauge of labor market conditions, at 6:45 p.m.
The day will end with the Australian Trade Balance of the difference between imports and exports, at 9:30 p.m., along with the Australian Retail Sales, an important measure of consumer spending.
Thursday, May 6 will bring one of the most important events of the week: the U.K. Parliamentary Election, which could have an impact on the financial markets and the GBP throughout the day and into the following trading session.
The economic data sequence will start with a spotlight event, the Swiss CPI (Consumer Price Index), the main measure of inflation, at 3:15 a.m.
Two notable reports will come with the releases of the U.K. Services PMI- Purchasing Managers' Index, a leading indicator of economic conditions measuring the activity of purchasing managers in the services sector, at 4:30 am, ET, and the German Factory Orders, a leading indicator of economic activity measuring orders placed with manufacturers, at 6:00 am, ET.
One of the main spotlight events of the week will deliver the European Central Bank Interest Rate Announcement, at 7:45 a.m., followed by the Canadian Building Permits, a leading indicator of housing market conditions, at 8:30 a.m.
Another significant event that morning will be the European Central Bank President Jean-Claude Trichet's press conference following the ECB Governing Council's interest rate decision, expected around 8:30 a.m. The language of the ECB statement will be closely watched for any hints of future changes in the bank's monetary policy and for the ECB position on the Greek and the EU debt crisis.
The U.S. economic reports will begin with the weekly Jobless Claims, a gauge of labor market conditions measuring new unemployment claims, at 8:30 a.m., along with the U.S. Non-farm Productivity and Labor Costs Index, measuring the growth of labor efficiency and price changes in labor costs.
A notable Canadian economic data will bring the Canadian Ivey PMI (Purchasing Managers' Index), a leading indicator of economic conditions measuring the activity of purchasing managers in all sectors of the economy, at 10:00 a.m.
The U.S. economic reports will continue with the U.S. EIA (Energy Information Administration) Weekly Natural Gas Inventories, at 10:30 a.m.
The day will conclude with two notable economic releases: the Australian Construction PMI (Purchasing Managers' Index), a leading indicator of housing market conditions measuring the activity of purchasing managers in the construction sector, at 7:30 p.m., and the Reserve Bank of Australia Monetary Policy Report on economic conditions and future monetary policy, at 9:30 p.m.
Friday, May 7 will begin with the Swiss Unemployment Rate, the main gauge of labor market conditions, at 1:45 a.m., followed by the Swiss Retail Sales, an important measure of consumer spending, at 3:15 a.m.
A notable report from the U.K. will bring the Input and Output PPI (Producers Price Indexes), the main measures of wholesale inflation experienced by manufacturers and leading indicators of consumer inflation, at 4:30 a.m.
The German Industrial Production, the main gauge of industrial activity measuring the output of factory, mines and utilities in the Euro-zone's largest economy will follow at 6:00 a.m.
News from Canada will deliver a spotlight event: the Canadian Employment Situation and Unemployment Rate, the main gauge of labor market conditions, at 7:00 a.m.
The busy first trading week of the month will conclude with its main spotlight event: the U.S. Non-Farm Payrolls and Employment Situation report, one of the most important indicators of economic health, measuring the number of new jobs created, scheduled at 8:30 a.m., along with the U.S. Unemployment Rate and Average Hourly Earnings.
If the consensus forecasts are accurate, this could be another positive Non-Farm Payrolls report with the unemployment rate expected to remain steady at 9.7% and the U.S. economy adding as many as 175K jobs, compared with 162K jobs added in the previous month.
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