EUROPEAN SESSION
In the European session, we have the Swiss Q1 GDP, the Eurozone unemployment rate and the final PMIs for the major Eurozone economies and the UK. None of the data should change anything for the respective central banks at this point.
As a reminder, the SNB isn’t expected to adjust interest rates anytime soon. The SNB has vowed to intervene in the FX market when necessary but haven’t done much. The ECB is widely expected to hike in June and then take a pause at least until September to see how the data and the US-Iran situation evolves over the summer. Lastly, the BoE is leaning more towards holding rates steady for longer rather than opting for rate hikes.
AMERICAN SESSION
In the American session, the main highlight is the US ISM Manufacturing PMI which is expected to tick higher to 53.0 vs 52.7 in the prior month. The S&P Global US Manufacturing PMI showed that factory growth was again in part supported by temporary stock building and order book growth had been somewhat subdued by the ongoing war in the Middle East, most notably in terms of export sales.
Moreover, input costs jumped in May at the steepest rate since late-2022 on the back of rising war-related supply constraints and steep energy cost increases. Costs were not only cited as causing lower sales but also contributed to steepening job losses and a further rise in selling price inflation to its highest since August 2022.
The next NFP and CPI reports will be more important for the Fed ahead of the 16-17 June FOMC meeting
