As the UK enjoys some rare summer weather, Thomas Watts, Investment Analyst, abrdn Portfolio Solutions, comments on the economic data releases this week, with the main focus being on Europe and the ECB this coming Thursday;
“This week ushers in not only a raft of economic data but also the commencement of June, a month named after the Roman goddess Juno, who’s name is thought to be connected to love or Jove in ancient Roman.
“There is plenty to love on the continent next week, as we start off the economic calendar with a plethora of Manufacturing index numbers released throughout Europe, covering the bloc’s largest economies. The batch of data will also include figures from both the UK and US, giving investors a much more comprehensive view on what is happening at a company level across the globe.
“Thursday sees the European Central Bank (ECB) announce its latest borrowing costs, accompanied by a press conference that gives the reasons for such a move, outlining the bank’s current thinking. With a recent poll of economists held by Reuters showing all 82 participants predicting a 0.25% rate cut next week, a move seems almost guaranteed. However, investors will now be looking for hints that further cuts may be coming down the track, with financial markets currently pricing two ECB rate cuts in total in 2024, a sharp pullback from six expected at the start of the year, but still factoring in a further move after June.
“As ever, the first Friday of the month brings US Non-Farm Payroll data. A key piece of information when determining the US central bank’s thinking on inflation, the employment data itself will be accompanied by Average Hourly Earnings, allowing us to more accurately gauge future demand expectations as the more consumers earn, the more they tend to spend. It all combines to be a vital piece of data for the Fed and should take on added significance, considering the extra impetus put on such data going forward from US central bank officials. The data could even take on added significance with the Fed’s peer in Europe cutting rates the day beforehand.”
