Welcome to Michael Kramer’s pick of the key market events to look out for in the week beginning Monday 2 June.
An eventful first week of June could bring more market uncertainty and potential volatility. Closely watched US data releases – including surveys of manufacturing and services firms by the Institute for Supply Management (ISM), and the job openings and labour turnover survey (JOLTS) – will set the stage for the US jobs report on Friday. Adding to the mix, the European Central Bank’s rate-setting meeting on Thursday will attract attention as markets try to gauge whether the central bank is nearing the end of its rate-cutting cycle. On the earnings front, Broadcom – the eighth-biggest listed US company by market cap, just behind ‘magnificent seven’ member Tesla – will need to deliver strong results and a positive outlook to maintain the momentum behind the AI trade.
ECB interest rate decision
Thursday 5 June
The market expects the ECB to cut rates by 25 basis points at this week’s meeting. But the real question is what comes next. For now, markets aren’t pricing in another rate cut until October – and that may well be the final cut of this cycle, based on current expectations. Should the ECB signal that it’s approaching the end of its rate-cutting cycle, it could provide further support for the euro, particularly if the Federal Reserve still has rate cuts ahead.
The EUR/USD pair has shown remarkable resilience in recent weeks and continues to trend higher. Notably, the pair has once again found support at $1.12, while maintaining the uptrend established in early March. Momentum, as measured by the relative strength index (RSI), also suggests an ongoing upward bias. The key hurdle now remains a break above $1.1470.
EUR/USD, November 2023 - present
Broadcom Q2 earnings
Thursday 5 June
Analysts expect Broadcom to report second-quarter earnings growth of 42.5% to $1.56 a share, driven by a 20% rise in revenue to $15bn and supported by a gross margin of 78.8%. Looking ahead to the third quarter, the Nasdaq-listed semiconductor company’s revenue is forecast to grow 20.7% to $15.8bn, although margins are expected to slip slightly to 78%. The stock – which rose 1% on Thursday to close at a shade under $242 – could move roughly 7.5% higher or lower in post-earnings trading, based on current options market pricing.
Given the size of the expected move, it’s no surprise that implied volatility is currently elevated for the week of 6 June, sitting above 70% and likely to exceed 100% by the time the company reports. It’s also worth noting that positioning appears quite bullish. However, for the stock to move higher and post new all-time highs, it will need to clear a major gamma resistance level at $250.
From a technical perspective, $250 has proven to be a difficult barrier for the stock. Momentum indicators suggest it is currently overbought, with the RSI reading above 75. Additionally, the gap at $245 now appears to have been filled. While a breakout above $250 is certainly possible, it may not come easily. To the downside, a break below $233 could result in the stock falling to fill a gap near $209.
Broadcom share price, December 2023 - present
US May jobs report
Friday 6 June
The upcoming jobs report is expected to show that the US economy added 130,000 jobs in May, with the unemployment rate unchanged at 4.2%. April’s non-farm payrolls print came in stronger than expected, so investors will not only be watching the May figures closely but will also be paying attention to any potential revisions to the April data.
Amid rising interest rates in Japan and growing uncertainty in the US, the USD/JPY exchange rate is reflecting both a carry trade unwind and a potential shift into a safe-haven trade. The pair has broken down, falling out of a megaphone pattern (the pair of diverging blue lines on the chart below), and has recently tested the breakdown level near ¥142. If USD/JPY can push below ¥142.35, it could be on track to retest the ¥140 level in the near term. Any data that suggests further weakening of the US economy is only likely to add to that tailwind.
USD/JPY, January 2025 - present
Economic and company events calendar
Major upcoming economic announcements and scheduled US and UK company reports include:
Monday 2 June
• Switzerland: Q1 gross domestic product (GDP)
• US: May ISM manufacturing purchasing managers’ index (PMI)
• Results: The Campbell's Company (Q3)
Tuesday 3 June
• Australia: Reserve Bank of Australia meeting minutes
• China: May Caixin manufacturing PMI
• Eurozone: May preliminary harmonised CPI
• Switzerland: May consumer price index (CPI)
• Results: CrowdStrike (Q1), Dollar General (Q1), Ferguson (Q3), Guidewire Software (Q3), Hewlett Packard Enterprise (Q2), Pennon (FY)
Wednesday 4 June
• Australia: Q1 GDP
• Canada: Bank of Canada interest rate decision
• US: May ISM services PMI, May ADP employment change
• Results: Dollar Tree (Q1), Ninety One (FY), Paragon Banking (HY)
Thursday 5 June
• Australia: April trade balance
• China: May Caixin services PMI
• Eurozone: European Central Bank interest rate decision
• US: Weekly initial jobless claims
• Results: Broadcom (Q2), Brown-Forman (Q4), CMC Markets (FY), Docusign (Q1), Lululemon (Q1), Mitie (FY), Rubrik (Q1), Samsara (Q1), Wise (FY), Wizz Air (FY)
Friday 6 June
• Canada: May unemployment rate
• Eurozone: Q1 GDP, April retail sales
• Germany: April trade balance
• US: May jobs report, including non-farm payrolls
• Results: ABM Industries (Q2)
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.
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