Forex Weekly Outlook May 30-Jun 3

The US dollar had a positive week despite a lack of really convincing data. GDP from Canada and Australia, a buildup to the Non-Farm Payrolls, OPEC Meetings and the ECB decision stand out in a very busy week. These are the main events on forex calendar. Join is as we explore the market movers for this week.

US economic data was mostly OK suggesting an improvement in domestic growth. Orders for long lasting products surged 3.4% in May from an upwardly revised 1.9% in the previous month, way higher than the 0.3% rise estimated by analysts. Core orders also improved, gaining 0.4% after a 0.2% drop in April. In the housing market contracts to purchase previously owned homes surged to a 10-year high of 5.1% from 1.6% in the month before. The job market posted another decline in the number of new jobless claims, posting 268,000 while economists expected 275,000. US second annual GDP estimate for the first quarter was upwardly revised from 0.5% to 0.8%. All in all, a good week for the US economy. Let’s start:

1.  Canadian GDP data: Tuesday, 12:30. Canadian economy contracted 0.1% in February, the first decline in five months amid a slowdown in the manufacturing, mining and energy sectors. Meanwhile, retail sales, finance insurance and construction balanced the fall. The reading was in line with market forecast. The contraction in February came after a 0.6% gain in January. However, despite this fall, economists still expect a strong reading in the first three months. March GDP is expected to remain flat.
2. US CB Consumer Confidence: Tuesday, 14:00. U.S. consumer confidence weakened in April, falling to 94.2 from a downwardly revised 96.1 in March. Economists expected a higher reading of 95.8. Current conditions improved to 116.4 from 114.9 in the prior month proposing economic growth remains intact. However, the short-term outlook index fell to 79.3 from 83.6 suggesting lack of growth momentum. Nevertheless, economists believe this is a temporary setback since the fundamentals for consumption remain encouraging and job growth remains solid. Consumer confidence is expected to reach 96.1 in May.
3. Australian GDP data: Wednesday, 1:30. Australian economy expanded 0.6% in the fourth quarter of 2015, slower than the 0.9% jump registered in the previous quarter but stronger than the 0.4% gain forecast by analysts. The GDP report supported the RBA’s decision to maintain interest rates at a record low of 2%. Governor Glenn Stevens stated he believes the economy will continue to expand in the coming months, but falling commodity prices and weak income are likely to weigh on growth. Economists expect GDP to grow 0.6%  in the first quarter.
4. Chinese Caixin Manufacturing PMI: Wednesday, 1:45. This independent gauge of activity in the world's second largest economy is important for the whole world. During many months, China's important manufacturing sector has been in contraction according to this measure, under the 50 point threshold separating contraction and expansion. A minor drop is expected for May: from 49.4 to 49.3 points.
5. US ISM Manufacturing PMI: Wednesday, 14:00. US manufacturing sector had a temporary setback in April, declining 1% from March, reaching 50.8.The reading was worse than the 51.6 estimated, but still remained in expansion. Expectations about future inflation jumped following the sharp rose in March. Out of eighteen manufacturing industries, eleven reported growth in April, down slightly from twelve in March. The manufacturing sector is expected to remain in the grow zone with 50.6.
6. OPEC Meetings: Thursday. The oil market is gradually recovering from its two- year slump though crude is still trading at low rates. Mohammed bin Saleh al-Sada president of OPEC said a minimum price of $65 a barrel is "badly needed at the moment." Sada also noted that higher prices will enable OPEC members to invest more in order to secure the energy supply to the world and avoid any price shock." The idea for a production freeze remains on the table despite the failed attempt in Qatar. Venezuela has suggested that non-OPEC producers might also participate in the June meeting. Sada noted OPEC members are consulting about it, whether it is appropriate to have it in the meeting, parallel to the meeting, or after the meeting.
7. EU Rate decision: Thursday, 11:45 The European Central Bank kept rates on hold on their April meeting. President Draghi responded strongly to Germany’s finance minister, Wolfgang Schäuble’s accusations that the ECB’s monetary policy of dropping euro interest rates is hurting German savers and fueling right wing nationalism. Draghi said that stress loose policy was required to ignite inflation back to the central bank’s target and warned that those who threatened ECB independence with “criticisms of a certain type” were making Europe’s economic problems worse.
8. US ADP Non-Farm Payrolls: Thursday, 12:15. April’s monthly ADP report was the weakest statement in three years, showing that employment in the private sector increased by only 156,000 compared to 194,000 registered in March. Meanwhile, analysts expected a gob growth of 205,000. The services sector added 166,000 new jobs, while the goods-producing sector lost 11,000 jobs amid continuous hardships in the manufacturing sector. Despite the overall decline, small businesses remained robust in April. ADP non-farm payrolls is expected to register a job gain of 179,000.
9. US Unemployment Claims: Thursday 12:30. The number of new jobless claims fell to 268,000 last week, dropping 10,000 from the previous report. Jobless claims have declined for the second consecutive week, indicating the job market continues to improve despite the temporary weakness in the first quarter. Economists expected 275,000 new claims for the week. The four-week moving average of claims increased to 278,500 from 275,750. The number of people continuing to receive jobless benefits edged up by 10,000 to 2.16. The number of new jobless claims is expected to reach 271,000 this week.
10. US Crude Oil Inventories: Thursday, 15:00. U.S. crude inventories plunged last week to a seven week low of minus 4.2 million barrels. The report showed a surprising rise in supplies from Canada, as weekly imports edged up to 3.09 million bpd, from 2.59 in the previous week. Traders said they expect further declines in Canadian imports in the coming weeks.
11. US Non-Farm Payrolls: Friday, 12:30. US major employment report showed a disappointing job gain of 160,000 in April, suggesting temporary weakness in the labor market. This was the smallest gain in seven months. Analysts anticipated an addition of 203,000 jobs. The slowdown in hiring came together with weak economic growth, subdued productivity and corporate profits. Many economists downgraded their interest rate hike expectations for this year to one from two before the report. Meanwhile, the unemployment rate remained steady at 5.0% since people dropped out of the labor force. Non-Far, Payrolls is expected to show a job addition of 160,000 while the unemployment rate forecast is 4.9%.
12. US ISM Non-Manufacturing PMI: Friday, 14:00. U.S. service sector expanded in April, according to the Institute for Supply Management index, rising to 55.7 from 54.5 in the prior month. The business activity index declined to 58.8 from 59.8 the month before and the employment index rose to 53.0 from 50.3 a month earlier. New orders edged up to 59.9 from 56.7. U.S. service sector is expected to expand to 55.4 this time.

That's it for the major events this week. Stay tuned for coverage on specific currencies

*All times are GMT.