Select the account you'd like to open

The Week Ahead: China PMIs, ECB rate decision, US jobs

Read on for Michael Kramer's weekly market preview, or watch the video above for RRG Research’s analysis of major share indices and US tech stocks.

Welcome to Michael Kramer’s pick of the top three market events to look out for in the week ahead. 

Macroeconomic headlines are set to dominate the coming week. In particular, traders are likely to focus on US labour market data on Friday 7 June and, before that, manufacturing and services readings from China and the US. Plus, on Thursday the European Central Bank will decide whether or not to cut interest rates. 

China May manufacturing and services PMIs

Monday 3 and Wednesday 5 June
Investors have been paying close attention to the recent recovery of stocks in China and Hong Kong, along with surging commodity prices. This makes macro data from China important again. The May reading of the Caixin manufacturing purchasing managers’ index (PMI), out on Monday, is expected to come in at 51.6, up from 51.4 in April. A reading above 50 indicates that the manufacturing sector is expanding, usually a bullish sign for China’s currency and economy. If the May forecast proves correct, it would be the highest reading since February 2023. Meanwhile, Caixin services PMI, out on Wednesday, is expected to rise to 52.6, up from 52.5 in April. 

Of the two data points, Monday’s manufacturing PMI print looks particularly important. A resurgent manufacturing sector in China, which has moved out of contraction territory based on recent PMI readings, could be bullish for industrial metals such as copper, which has surged in price this year. The price of copper – a key gauge of global economic health given the metal’s use in construction and a wide variety of products – reached overbought levels in mid-May when it climbed to more than $5 a pound on the COMEX commodities exchange. Since then, prices have retraced, finding support around the zone from $4.62 to $4.65. If that level holds, copper prices could move back up above $5. A robust manufacturing PMI print from China, the world’s largest consumer of copper, could help lift prices. However, a weaker-than-expected reading, indicating faltering manufacturing activity, could send copper prices down towards $4.42.

ECB interest rate decision

Thursday 6 June
The European Central Bank is expected to cut its overnight rate by 25 basis points at its 6 June meeting, with the swaps market pricing the likelihood of a cut at 98%. More importantly, the market will be listening for an indication of when to expect a second rate cut. For now, markets expect it to occur in October, but it could come sooner. If expectations start to build for a rate cut before October, the euro is likely to fall against the US dollar.

EUR/USD has failed multiple times to push above the $1.088 level in recent weeks. Now, it has broken under an uptrend formed from the April lows. An ECB rate cut and the suggestion of further cuts in the near term could result in the euro weakening against the dollar and heading back down to the $1.07 level. However, if the ECB doesn’t cut rates, or for some reason signals that rate cuts may not come until closer to the end of 2024, the market would be noticeably caught off guard, which could lead to a scramble, potentially causing the euro to surge and head back up towards $1.105.

US jobs report

Friday 7 June
The US jobs report will provide another indicator as to whether the Federal Reserve’s monetary policy is restrictive enough to slow the US economy. Analysts predict that the US economy added 185,000 non-farm payrolls in May, up from 175,000 in April. The unemployment rate is expected to remain at 3.9%, and average hourly earnings are expected to have risen 0.3% month-on-month, up from 0.2% month-on-month in April, while increasing 3.9% year-on-year, in line with the April figure.

Historically, job reports have often come in better than expected. April was a surprise, coming in weaker than expected, with some analysts attributing this to the Easter holiday falling in March. If history is any guide, it is possible that we will see headline numbers beat estimates once again.

The Fed has been reluctant to talk about the possibility of raising interest rates, but a strong jobs report with substantial wage gains may lead the market to increase the pressure. The best gauge for this is the US two-year Treasury rate, which has moved back to the upper end of its recent range near 5%. A push above 5% could open the possibility of a surge towards 5.25%. If this happens, it would be a clear signal from the market to the Fed that the latter may need to raise rates at some point later this year.

Conversely, weaker numbers, or figures that miss expectations, will probably send the US two-year rate back down to the lower end of the range at 4.75%.

Key economic and company events

Here’s our rundown of notable economic announcements and company reports scheduled for the coming week:


• China: May manufacturing purchasing managers’ index (PMI)
• US: May Institute for Supply Management’s (ISM) manufacturing PMI
• Results: Hollywood Bowl Group (HY)


• Germany: May unemployment rate
• Switzerland: May consumer price index
• Results: Bath & Body Works (Q1), Core & Main (Q1), Crowdstrike (Q1), Ferguson (Q3), Hewlett Packard Enterprise (Q2)


• Australia: Q1 gross domestic product (GDP)
• Canada: Bank of Canada interest rate decision
• China: May services PMI
• US: May ADP employment change; May ISM services PMI
• Results: B&M European Value Retail (FY), Brown Forman (Q4), Campbell Soup (Q3), Dollar Tree (Q1), Lululemon (Q1)


• Australia: May trade balance
• Eurozone: April retail sales; ECB interest rate decision and press conference
• Germany: April factory orders
• Results: Docusign (Q1), JM Smucker (Q4), Mitie (FY), Samsara (Q1)


• Canada: May unemployment rate
• China: May imports, exports and trade balance
• Eurozone: Q1 GDP
• Germany: April imports, exports and trade balance; April industrial production 
• US: May jobs report, including non-farm payrolls
• Results: J. Jill (Q1)

Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.

Index dividend schedule

Dividend payments from an index's constituent shares can affect your trading account. View this week's index dividend schedule.