Weekly Market Outlook (06-10 May)

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  • Monday: China
    Caixin Services PMI, Eurozone PPI, Fed SLOOS.
  • Tuesday: RBA
    Policy Decision, Switzerland Unemployment Rate, Eurozone Retail Sales.
  • Thursday: Japan
    Average Cash Earnings, BoJ Summary of Opinions, BoE Policy Decision, US
    Jobless Claims.
  • Friday: New
    Zealand Manufacturing PMI, UK GDP, Canada Jobs report, US University of
    Michigan Consumer Sentiment survey,


The RBA is expected to keep the Cash Rate
unchanged at 4.35%, although the risk of a shock rate hike cannot be dismissed.
The last
inflation report
was a cold shower for
rate cuts expectations in 2024 as the Q1 CPI figures beat forecasts across the
board by a big margin. The market pushed back the expectations for the first
rate cut further away with the first move now seen sometime in Q2 2025. The
central bank stated several times that the best contribution that monetary
policy can make to the wellbeing of the Australian people is to ensure that
inflation returns to target in a reasonable timeframe.



The Japanese Average Cash Earnings Y/Y is
expected at 1.5% vs. 1.8% prior. The BoJ continues to see the achievement of
their inflation target and stating that another rate hike remains dependent
on the data
. The timing for such a move remains uncertain though with July
and October being on the table, although the latter is the most probable one.
Governor Ueda has also mentioned that irrespective of what the data would say
in the near future, they would like to find a way and timing to reduce the
amount of JGB purchases.

Japan Average Cash Earnings YoY

The BoE is expected to keep interest rates
unchanged at 5.25%. The latest
inflation report
showed the headline and
core figures moderating further but the services inflation measure, which is
what the central bank is more concerned about, remaining sticky at 6%.
the labour market side, the
last data
showed an increase in the
unemployment rate and job losses with high wage growth figures. At the last
, the vote split changed with the
most hawkish members joining the hold camp and Dhingra remaining the usual
dissenter voting for a cut. The market expects the first rate cut in September
and it’s unlikely that we will see the BoE making major changes at the upcoming


The US Jobless Claims continue to be one
of the most important releases to follow every week as it’s a timelier
indicator on the state of the labour market. This is because disinflation to
the Fed’s target is more likely with a weakening labour market. A resilient
labour market though could make the achievement of the target more difficult.

Initial Claims keep on hovering around cycle lows, while Continuing Claims
remain firm around the 1800K level. This week Initial Claims are expected at 210K
vs. 208K prior,
while there is no consensus at the time of writing for Continuing Claims
although the prior release showed a decrease to 1774K vs. 1797K expected and 1781K

US Jobless Claims


The Canadian labour market report is
expected to show 17.5K jobs added in April vs. -2.2K in March with the
unemployment rate ticking higher to 6.2% vs. 6.1% prior. The last
missed expectations across the board
with job losses and a big jump in the unemployment rate. There was also an
increase in wage growth, which is what the BoC is more concerned about, although
a looser labour market should depress wage gains going forward
. The market
expects the central bank to deliver the first rate cut in June, although the probability for a July move is higher.

Canada Unemployment Rate

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