From fxstreet
United States: Markets are closed Monday for Memorial Day. Last Friday, Fed Chair Yellen confirmed what other policymakers have been saying, that a rate hike would be appropriate in “coming months” if data continued to improve. The employment report for May (Friday) will be most crucial piece of data heading into the June 14, 15 FOMC meeting. While the bar has been lowered in terms of the degree of strength necessary to allow the Fed to pull the trigger on June 15, an unambiguously soft report would likely delay a move. We’re forecasting a 190k increase in jobs, following the tepid 160k April gain. The unemployment rate is seen dipping back to 4.9% after inching up to 5.0%. Earnings are expected to rise 0.2%, while the workweek should dip to 34.4 from 34.5. The May ISM report (Wednesday) will be another key, along with the non manufacturing numbers. May income and consumption (Tuesday) will be monitored too as they are also key inputs in the Fed’s calculus. Income is expected to rise 0.4%.Consumption is expected to climb 0.6%, which would be the best since last May’s 0.9% print. Vehicle sales will be a key indicator too. Sales are seen 1.0% to a 17.5 mln pace, from 17.3 mln in April. The April trade numbers are a major component in the GDP outlook and the deficit is expected to widen slightly to -$40.9 bln from -$40.4 bln. Other data this week includes the ADP private payroll survey, the Chicago PMI, construction spending and factory orders.). The manufacturing sentiment index is estimated dipping to 50.5 after falling 1 point to 50.8 in April. Fedspeak will help the markets price in the likelihood of a June or July tightening after Yellen added to the drumbeat of a rate hike in coming months. Governor Powell (voter) and Kaplan are on tap (Thursday) with the former discussing regulation and the latter speaking on the economy. Brainard (voter) and Evans (Friday) will give their views on policy and the economy. And Mester (voter) speaks on macro stability (Saturday) at a Riksbank conference. Fedspeak will dry up next week heading into the blackout period ahead of the June 14, 15 FOMC meeting.
