This week features various manufacturing and services Purchasing Managers’ Indices (PMIs) from Europe, Canada, and the U.S., along with U.S. and Canadian labour market statistics.
The week starts with manufacturing PMIs from multiple regions, centring on the U.S. ISM manufacturing PMI and prices. Australia’s monetary policy meeting minutes and retail sales data will be released on Tuesday, while Wednesday focuses on Australia’s GDP data and Switzerland’s inflation figures.
Thursday includes the ECB’s monetary policy announcement and U.S. unemployment claims data. Key labour market data from the U.S. and Canada will be released on Friday.
Us Manufacturing Outlook
For the U.S., the ISM manufacturing PMI consensus is 50.6, slightly lower than 50.9, while ISM manufacturing prices are expected to rise to 56.2. Last month, the manufacturing PMI index exceeded 50, suggesting expansion, despite headwinds from weak global demand and higher interest rates.
The ISM services PMI consensus is set at 53.0, up from 52.8, indicating a resilient services sector amid economic uncertainty. Analysts note that consumer demand for services is strong, supported by a robust labour market, although inflationary pressures remain.
Switzerland’s CPI is expected to rise by 0.5% month-over-month, aligning with a 0.2% quarterly economic expansion in Q4 2024. With inflation easing, a 25 basis points rate cut from the Swiss National Bank is anticipated.
The ECB is also likely to announce a 25 basis points rate cut, as recent inflation figures and economic contractions in Germany and France prompt continued policy easing.
In Canada, employment change is predicted to be 17.8K with a slight unemployment rate rise to 6.7%. Ongoing uncertainty regarding U.S. tariffs may hinder hiring momentum, despite recent labour market stabilisation.
In the U.S., average hourly earnings are expected to rise by 0.3%, while non-farm employment change may reach 156K. The unemployment rate is anticipated to remain at 4.0%, though slower labour demand is indicated by declines in small business hiring and job postings.
Wells Fargo predicts a potential uptick in the unemployment rate to 4.1% and a slight decline in federal government payrolls due to workforce reductions. Economic factors suggest that slower labour force growth may limit future wage declines.
The upcoming days bring a series of releases that will shape expectations across multiple sectors. Manufacturing and services PMIs across key global economies will provide fresh insights into business conditions, while employment reports from North America will set the tone for wage trends and hiring activity.
A weaker reading for the U.S. ISM manufacturing PMI suggests that growth across factories could be stalling, even as manufacturers navigate higher borrowing costs and weakened international demand. However, prices in this sector are continuing to climb, pointing to stubborn cost pressures that may affect future production decisions. Services, meanwhile, appear to be holding firm despite ongoing pressure from shifting consumer habits and tighter financial conditions.
Australia’s economic data will show how its economy performed in the last quarter, with its monetary policy minutes shedding light on rate-setters’ latest views. Inflation in Switzerland, expected to rise modestly, fits into a wider pattern of subsiding cost pressures, offering policymakers enough confidence to proceed with gradual rate cuts. The decision by the Swiss National Bank is likely to confirm what many have been anticipating: more policy easing ahead.
European Central Bank Policy Shift
In Europe, all eyes will be on Christine and her colleagues as they reveal their latest monetary policy adjustments. With inflationary pressures appearing to moderate and Germany and France struggling with weaker output, the expected rate cut from the ECB is in line with previous signals. The central bank remains focused on balancing its response to economic weakness while ensuring it does not move too aggressively.
Canada’s employment report is likely to reflect a mix of stabilisation and underlying concerns. While hiring numbers show continued resilience, the rise in unemployment could highlight hesitancy among businesses facing uncertainty around trade policy. Another month of moderate wage growth could reinforce expectations that the employment situation is cooling gradually rather than faltering outright.
On the other side of the border, wage growth in the U.S. remains in focus, with a modest rise in hourly earnings anticipated. Hiring figures, while positive, are expected to soften, reflecting a more cautious stance among employers. Although the country’s unemployment rate has held steady at 4.0%, Wells Fargo’s forecast of a slight uptick suggests that wider economic shifts are beginning to influence job markets. Additionally, planned reductions in federal payrolls could further shape the overall employment picture.
These labour market shifts, paired with the inflation outlook and monetary policy developments, will play a key role in shaping expectations among those closely watching how central banks respond. While the data provides clarity in some areas, it also leaves open questions about the path ahead for interest rates and employment conditions.
