Busy data docket sees US ADP payrolls and a BoC rate decision

German stocks are leading European markets higher, with manufacturing names Airbus, Siemens, and Infineon tech outperforming. In a morning that sees a raft of final PMI figures released in Europe, we have seen largely positive updates that have helped push the eurozone and UK composite metrics back up into expansion territory for May. Coming hot off the heels of yesterday’s CPI decline, the largely flatlining eurozone economy provides a clear signal for Lagarde & co to cut rates once again tomorrow.

Russia and Ukraine have once again failed to make any meaningful breakthrough that opens a pathway to a ceasefire, with another prisoner swap instead signalling that the conflict looks set to continue apace. With the US pushing NATO members to spend 3.5% of GDP on defence, the UK have clearly set out plans to ramp up defence spending in the face of the Russian threat. While some had expected Trump’s Presidency to provide a pathway to end the conflicts in Gaza and Ukraine, there are precious few signs of optimism that either will be halted anytime soon.

Looking ahead, today sees a raft of big ticket events with the ADP payrolls and ISM services PMI figures being released in the US. Coming off the back of last month’s dour 62k ADP figure, markets are now expecting a rise back up above the 100k mark to ease concerns ahead of Friday’s jobs report. Meanwhile, the Bank of Canada have to weigh up whether to cut rates again today, with rising unemployment and weaker growth prospects counterbalanced by growing inflation concerns. Markets expect the bank to keep rates steady this time around, which would represent the second consecutive pause after a string of seven rate cuts seen over the past year.