This week, the traders will be following the European elections results. The situation in the world markets depends on who will take key posts in the Euro Union. The US will release the Conference Board data and quarterly GDP. The Bank of Canada will take the interest rate decision. China is to release the Services PMI.
A day off in the US. European election
It is a federal holiday in the US—Memorial Day. Exchanges will be closed. One should not expect volume trends in the stock market. However, on this day, Forex traders will be trading the results of the European elections.
The EU election results will be announced. The head of the European Commission Jean-Claude Juncker, European Council President Donald Tusk and the EU foreign policy chief Federica Mogherini will probably announce their resignation. Following the elections, radical parties can strengthen their positions.
Against this background, there may be an increased volatility in the Forex market, and the euro sideways trend might finally come to an end.
The Conference Board data. Key posts in the EU
At 14:00 GMT, the Conference Board consumer confidence index will be released in the US. The experts expect the result of 129.8 points. However, the escalation of trade relations with China may cause a decline in consumer confidence.
European leaders will meet in Brussels to discuss candidates for key posts in the EU. It is possible that German Chancellor Angela Merkel will take the presidency of the EU Commission. However, the final decision will be made only on June 20-21.
Traders will be interested in the new head of the ECB. The list of candidates to succeed Mario Draghi includes the head of the Bundesbank, Jens Weidmann, the president of the Bank of France, François Villeroy de Galo, a member of the ECB executive board, Benoit Köret, and the former head of the Bank of Finland, Erkki Liikanen.
The Bank of Canada rate decision
At 14:00 GMT, the Bank of Canada will release its interest rate decision. Now the reading is 1.75%. Investors do not expect it to be changed. However, the comments made by members of the bank’s board of directors may cause an increase in the volatility of the Canadian currency.
The US GDP. The US-Canada-Mexico deal
At 12:30 GMT the US will report on the country’s GDP for the first quarter. Experts expect a decline from 3.2% to 3.1%. Lower readings will be taken negatively by investors. There might be sell-offs of the American stocks.
US Vice President Mike Pence is to visit Canada to meet Prime Minister Justin Trudeau. Reportedly, Pens’ trip should speed up the adoption of a trade agreement between the United States, Canada and Mexico.
The United States has lifted tariffs on Canadian and Mexican steel. If the results of the meeting are favorable, the currencies of the countries of the trade agreement might gain a positive momentum.
The Services PMI in China
At 01:00 GMT, China will release the country’s services PMI. A lower reading than 54.3 points will put pressure on the world stock indices. Such a result will confirm the upcoming global recession.