Currency and Stock Markets Weekly Outlook

Weekly Outlook

Fri, May 30 2008, 15:38 GMT
by Adam Narczewski

X-Trade Brokers, XTB

We have not had such an exciting week ahead of us in a long time. We kick-off on Monday with the U.S ISM-Manufacturing report, which supposed to remain at the same level, still below 50 points (at 48.6) meaning a slowdown of the economy. Also, investors will pay attention to Jean-Claude Trichet, who is due to speak at the ECB's 10th Anniversary conference.

On Tuesday, those who play on the AUD need to follow the RBA interest rate statement. The day though will be filled with speeches of central banks’ chairmen. ECB’s chairman, Trichet, is expected to deliver a speech at the International Monetary Conference, in Barcelona. Bank of Japan’s Governor Shirakawa and Fed’s chairman, Ben Bernanke, will speak at the same conference.

Interesting things will be happening on Wednesday. Early in the morning we will learn the Australian GDP for the first quarter while late at night New Zealand’s interest rate statement. In the meantime, the financial world will be focused on news flowing from the U.S. We will get to know how the labor market is doing with the ADP Nonfarm Employment Change. Later on, the ISM-Nonmanufacturing report will be in the spotlight. The index is expected to remain above 50 points, indicating expansion. A series of speeches continues Bernanke, who will deliver a speech titled "Economic Challenges: 1975 and Now" at the Harvard Alumni Association's Class Day Exercise in Cambridge.

Thursday will be crucial for European investors. Both, the European Central Bank and the Bank of England are expected to release their interest rate statements. Analysts expect no changes from the current levels – ECB at 4.00% and the BOE at 5.00%. More important for investors will be the press conferences held after the decisions.

Big day on Friday! Actually, for this day investors have been waiting for a long time. Reports from the U.S labor market will be published and the outlook is not good. Unemployment rate is forecasted to increase to 5.1% from the previous 5.0%. The most important publication, Nonfarm payrolls, does not look optimistic neither. Analysts expect that 57K people lost their jobs in the nonfarm sector, which is worse than previously.

The summer is coming but investors are not in a vacation mood. This week, with the vast amount of important macroeconomic publications, will be very important for financial markets, since it can influence them for the next couple of weeks.