It looks like an interesting week ahead, with markets kicking off on the back of the global trade war reigniting over the weekend. President Trump confirmed tariffs of 25% on Canadian and Mexican imports and 10% on Chinese goods, prompting counter-tariffs and responses from all three nations.
Traders expect to see gapping on the Monday morning open as markets react to the latest updates. In addition to the heightened geopolitical situation, we have the usual data releases associated with the first week of the month, with US employment numbers taking centre stage, as well as a key interest rate update from the UK.
Here is our usual day-by-day breakdown of the major risk events this week:
Traders anticipate a lively start to the Asian open, with gapping likely across financial products as markets digest the weekend’s trade developments. Chinese markets remain on holiday, delaying their reaction for another day. On the data front, Australian Retail Sales figures are due early in the session, followed by Eurozone CPI numbers at the European open. However, the major data release of the day will come from the US, with ISM Manufacturing PMI figures scheduled for early in the US session. Despite this, US markets are expected to be dominated by the trade tariff updates from the weekend.
The macroeconomic calendar is relatively quiet on Tuesday, with little of note during the Asian and European sessions. However, the first key US employment update of the week arrives in the New York session with the latest JOLTS Job Openings data. Later in the session, we will also hear from Federal Reserve members Bostic and Daly.
The data calendar picks up early on Wednesday, with key New Zealand employment figures due in the Asian session. However, the rest of the session, including the European trading day, remains relatively uneventful. Activity increases in New York with the release of the ADP Non-Farm Employment data, followed by ISM Services PMI figures and the US Crude Oil Inventory update.
Thursday marks Waitangi Day in New Zealand, so Kiwi markets will be closed. The Asian market calendar remains light, but focus will shift to the UK once Europe opens, with Construction PMI figures scheduled before the Bank of England announces its latest interest rate decision. In the New York session, key data releases include the usual weekly US unemployment claims and Canadian Ivey PMI figures. Additionally, scheduled speeches from FOMC members Waller and Daly will be closely watched.
Friday is set to be a classic Non-Farms trading day. There are no notable data releases in the Asian or European sessions, but volatility is expected to rise significantly once New York opens. The highlight of the day is the release of the US Non-Farm Payrolls report, accompanied by Average Hourly Earnings and the Unemployment Rate. Meanwhile, Canadian traders will have their own employment data to contend with, released at the same time as the US figures. The week’s event calendar concludes later in the session with the release of the Preliminary University of Michigan Consumer Confidence and Inflation Expectations data.
