Investors are gearing up for a pivotal week as May begins. The Federal Reserve’s policy meeting takes center stage on Tuesday and Wednesday. Though the central bank is expected to maintain its current interest rate policy, market participants will be closely analyzing Chair Jerome Powell’s statements for hints about the timing of potential future rate cuts.
The week will wrap up with intense focus on the April US employment report. On either side of the rate decision will be Big Tech earnings, with Amazon ($AMZN) releasing its quarterly financials on Tuesday and Apple ($AAPL) following on Thursday.
Let’s dive into the key events and data points that will shape the week ahead.
🇪🇺 GDP q/q — April 30, at 12:00 GMT+3
The release of the Eurozone GDP growth rate for the first quarter of 2024 is scheduled for April 30th at 12:00 GMT+3. This closely watched economic indicator is expected to provide insights into the overall health of the 19-member eurozone economy.
Investors will be keenly observing the GDP data as it could have implications for the EUR/USD currency pair. A stronger-than-expected growth rate could support the euro, while a weaker reading could put downward pressure on the currency. However, it is crucial to note that the upcoming Federal Reserve meeting on Wednesday will also play a significant role in influencing market sentiment. Any hawkish signals from the Fed regarding interest rate hikes could outweigh the impact of the GDP data.
It is worth noting that the EUR/USD pair is currently trading above 1.0700, suggesting a relatively strong position for the euro. However, the interplay between the GDP data and the Fed’s meeting could lead to shifts in the currency’s direction.
🇺🇸 ADP Nonfarm Employment Change — May 1, at 15:15 GMT+3
The ADP Nonfarm Employment Change is a closely watched monthly economic indicator that measures the change in the number of people employed by private businesses in the United States. It is considered a leading indicator of the official nonfarm payroll report, which is released by the Bureau of Labor Statistics (BLS) a few days later.
The ADP Nonfarm Employment Change is expected to come in at 193,000 in April, up from 184,000 in March. This would be a positive sign for the US economy and could support the US Dollar.
Investors will be watching closely to see if the ADP report confirms the recent trend of strong job growth in the US. A strong report could boost the US Dollar, while a weak report could lead to selling pressure on the currency.
🇺🇸 Fed Interest Rate Decision — May 1, at 21:00 GMT+3
There’s little doubt as to the outcome of this week’s Federal Reserve meeting, as officials have stressed that they need to see more improvement in inflation before voting to lower rates from the current decades-high level of 5.25% – 5.5%.
Already some Federal Reserve officials have expressed doubts about the three rate cuts penciled in at the last meeting. All eyes will be on Chair Jerome Powell’s messaging after the meeting for hints on timing and the number of rate cuts expected.
Another key economic indicator coming this will be Friday’s job report. Employers added more jobs than economists expected in March and investors will be watching to see if that strength extends to April.
🇺🇸 Nonfarm Payrolls — May 3, at 15:30 GMT+3
Nonfarm Payrolls is a closely watched monthly economic indicator that measures the change in the number of people employed in the United States, excluding the farming industry, government workers, and self-employed individuals. It is considered the most important economic indicator for the US economy and is closely watched by investors, businesses, and policymakers.
Nonfarm Payrolls is expected to come in at 197,000 in April, down from 303,000 in March. This would be a significant slowdown in job growth, but it is still considered to be a positive sign for the economy. A strong report could boost equity markets, particularly the Dow Jones, Nasdaq, and SPX500, and could also support the US dollar. However, a weak report could lead to selling pressure in both equities and the USD.
🇺🇸 ISM Non-Manufacturing PMI — May 3, at 17:00 GMT+3
The ISM Non-Manufacturing PMI is a monthly economic indicator that measures the activity of the non-manufacturing sector in the United States. It is based on a survey of purchasing managers in various industries, including services, construction, and retail.
The ISM Non-Manufacturing PMI is expected to come in at 51.5 in April. This would be a slight decrease from the previous month’s reading of 52.3, but it would still indicate that the non-manufacturing sector is expanding. A strong report would suggest that the US economy is healthy and that the service sector is continuing to grow. However, a weak report could raise concerns about a slowdown in the economy.
That’s it for this week! 👋
