The big event in the coming week for global financial markets will be Friday’s release of the March U.S. employment report, as traders and investors look for further clues on the Federal Reserve’s likely rate hike trajectory through the end of the year.
U.S.-China trade frictions will also remain a central focus this week.
Over in Europe, investors will await the first estimate of euro zone inflation figures, which if they remain strong could push the European Central Bank another step closer to ending its mass stimulus program.
Meanwhile, in the UK, traders will focus on a trio of reports on activity in the manufacturing, construction and services sectors for further hints on the health of the economy and the likelihood of the Bank of England raising interest rates this year.
Elsewhere, in Asia, market participants will be looking ahead to monthly data on China’s manufacturing sector amid recent signs that momentum in the world’s second largest economy remains strong.
Finally, a monetary policy announcement from the Reserve Bank of Australia will also be on the agenda.
Ahead of the coming week, Investing.com has compiled a list of the five biggest events on the economic calendar that are most likely to affect the markets.
1. U.S. Employment Report
The U.S. Labor Department will release the nonfarm payrolls report for March at 8:30AM ET (1230GMT) on Friday, and it will be watched more for what it says about wages than hiring.
The consensus forecast is that the data will show jobs growth of 198,000, after adding 313,000 positions in February, while the unemployment rate is forecast to dip to 4.0%from 4.1%.
However, most of the focus will likely be on average hourly earnings figures, which are expected to rise 0.2%, following a gain of 0.1% a month earlier. On an annualized basis, wages are forecast to increase 2.7%, a tad faster than the 2.6% increase recorded in February.
A pickup in wages is usually a sign of rising inflationary pressures, which could support the case for a faster pace of rate hikes from the Fed in the months ahead.
This week’s calendar also features reports on ISM manufacturing and service sector growth, ADP private sector payrolls, auto sales, construction spending, trade figuresas well as factory orders.
In addition to the data, market players will also pay close attention to comments from a few Fed speakers this week for insights into the outlook for monetary policy.
Topping the agenda will be remarks from Fed Chair Jerome Powell, who is scheduled to speak about the economic outlook at the Economic Club of Chicago on Friday at 1:30PM ET (1730GMT).
Speeches from Fed Governor Lael Brainard, Cleveland Fed President Loretta Mesterand Atlanta Fed boss Raphael Bostic are also on the agenda.
The Fed hiked rates last month and stuck to its projection for two more rate hikes this year.
Meanwhile, on Wall Street, equities could see more volatility in the coming week after each of the three major U.S. averages logged their worst quarter in more than two years, as concerns over a global trade war and a rout in technology stocks dampened sentiment.
Elsewhere, news out of Washington D.C. is expected to keep investors on their toes, as they watch further developments amid a brewing trade war between the U.S. and China.
2. Euro Zone Flash Inflation
The euro zone will publish flash inflation figures for March at 0900GMT (5:00AM ET) Wednesday.
The consensus forecast is that the report will show consumer prices rose 1.4%, quicker than the 1.1% gain seen in February.
Perhaps more significantly, the core figure, without volatile energy and food prices, is seen inching up to 1.1%, from 1.0% a month earlier.
Besides the inflation report, this week’s calendar also features final survey data readings on euro zone business activity.
Even if inflation remains short of the European Central Bank’s target of almost 2%, its policymakers are now debating whether to end lavish bond buys later this year.
The ECB dropped its long-standing easing bias at its meeting last month, taking another small step in weaning the euro zone economy off its protracted stimulus.
3. UK PMI’s
The UK will release readings on March manufacturing sector activity at 0830GMT (4:30AM ET) on Tuesday, followed by a report on the construction sector on Wednesday and the services sector on Thursday.
The manufacturing PMI is forecast to dip to 54.8 from 55.2 a month earlier, construction activity is expected to weaken slightly to 51.2 from 51.4, while a survey on Britain’s giant services sector is forecast to slip to 54.2 from 54.5.
On the central bank front, Bank of England Governor Mark Carney is due to speak at the International Climate Risk Conference for Supervisors, in Amsterdam on Friday afternoon.
The BoE kept interest rates steady last month, but two policymakers unexpectedly voted for a hike, reinforcing the view that borrowing costs will rise in May for only the second time since the 2008 financial crisis.
Politics is also likely to be in focus, especially as the Brexit negotiations enter a key phase with a just a year to go until the deadline to agree to an official deal is reached.
While Britain’s economy is lagging behind the global recovery, it has held up better than the gloomy forecasts made at the time of the 2016 vote to leave the European Union.
4. China Manufacturing PMI
The Caixin manufacturing index, which focuses more on small and mid-sized firms, is due at 0145GMT Monday.
The survey is expected to rise by 0.2 points to 51.8 from 51.6.
The official Purchasing Managers’ Index released on Saturday rose to 51.5 in March, from 50.3 in February. That was well above the 50-point mark that separates growth from contraction on a monthly basis.
The PMI survey is seen as a good indicator of economic conditions and it is even preferred by some analysts to gross domestic product, which might be affected by poor seasonal adjustment and is prone to revisions.
China’s economy grew 6.8% in the fourth-quarter from a year earlier, helped by a rebound in the industrial sector, a resilient property market and strong export growth.
5. Reserve Bank of Australia Policy Meeting
The Reserve Bank of Australia’s (RBA) latest interest rate decision is due on Tuesday at 0430GMT.
Most economists expect the central bank to keep rates unchanged at the current record-low of 1.5% for the 18th straight meeting and maintain its neutral policy stance.
Policymakers are also expected to sound less confident that the economy would grow at 3% or more this year, in another sign rates will likely remain on hold for months to come.
Data on retail sales and the trade balance published later in the week should also capture some attention.
Investors expect policy will stay on hold for a long time to come, with interbank futures not fully pricing for a 25-basis point rise until early 2019.