Forex Trader: Upcoming Economic Events and Market Outlook (May 28 - May 31)

This week promises to be eventful for global markets with key economic data releases and significant events that could influence investor sentiment and market direction.

With inflation data, GDP figures, and central bank communications on the agenda, market participants will be closely monitoring these developments for insights into future monetary policies and economic conditions.

Key Economic Data Releases (GMT Times)

Tuesday, May 28:

• USD: CB Consumer Confidence

Wednesday, May 29:

• AUD: CPI y/y

• EUR: German Preliminary CPI m/m

Thursday, May 30:

• USD: Prelim GDP q/q

• USD: Unemployment Claims

• USD: Pending Home Sales m/m

Friday, May 31:

• CAD: GDP m/m

• USD: Core PCE Price Index m/m

Market Highlights

• European Markets: European shares rose, led by carmakers and utilities, despite thin trading volumes due to holidays in the UK and US. ECB official Francois Villeroy de Galhau suggested potential successive rate cuts in June and July, while Chief Economist Philip Lane emphasized maintaining restrictive policy through 2024.

• Inflation Concerns: Data might show a rise in eurozone inflation in May. Despite this, a June ECB rate cut remains likely, though future cuts are uncertain. Inflation data from Australia, Japan, the euro region, and the US will be closely watched.

• Asia-Pacific: The MSCI Asia Pacific index saw significant gains, particularly in Hong Kong, China, and Japan.

• US Markets: The Federal Reserve’s preferred inflation measure is expected on Friday. Key Fed officials, including John Williams and Neel Kashkari, are scheduled to speak this week.

Other Notable Events

• IMF Discussions: IMF reviews economic policies with Ukrainian authorities on Monday.

• South African Elections: Significant elections on Wednesday.

• Fed Beige Book: Release on Wednesday.

• Rate Decisions: South Africa's rate decision on Thursday.

• Economic Data: GDP data from Canada, Eurozone, and Turkey on Friday; Japan's unemployment, Tokyo CPI, industrial production, and retail sales also on Friday.

Market Commentary

• FX: The US dollar showed strength last week but faces resistance near JPY158 and EUR1.0785. Sterling gained on a softer CPI report but faces election uncertainties.

• Rates: US yields rose, with the 2-year yield nearing 4.96% and the 10-year yield at 4.50%. The yield curve inversion increased, indicating market concerns about future economic growth.

Commodity Movements

• Gold: Gained amidst market uncertainties.

• Copper: Fell, reflecting industrial demand concerns.

• Oil: Advanced after a significant weekly loss, with attention on the OPEC+ meeting and US demand.

Forex Trader

This week's economic calendar is packed with significant data releases and events that will influence global markets and the forex trader. Investors should pay close attention to inflation data across different regions and the upcoming speeches by key central bank officials.

The potential for ECB rate cuts, coupled with the Fed's cautious stance on easing policy, will be crucial in shaping market expectations. As always, developments in geopolitical events and commodity prices will also play a vital role in market dynamics.