The latest developments in the trade dispute between the US and the eurozone are likely to keep investors on edge in the first week of June. After various courts recently dealt with US President Trump's tariffs, a new announcement of tariffs on steel imports to the US is now causing a stir.
In the new trading week, investors are likely to pay particular attention to the publication of new US labor market data. The key interest rate decision by the European Central Bank (ECB) on Thursday should also be taken into account.
Trump announces doubling of tariffs on steel and aluminum imports
US President Donald Trump has announced a doubling of tariffs on steel imports from the current 25 percent to 50 percent of the value of goods, causing renewed unrest around the globe. According to Trump, the additional duties on imports would strengthen the US steel industry. "Nobody will get around it." The tariffs on aluminum are also to be doubled to 50 percent, it was said. It remained unclear whether there would be exceptions, for example for Canada and Mexico, which have a free trade agreement with the USA.
ISM data for the manufacturing sector at the start of the week
From the perspective of the economic data calendar, the ISM Purchasing Managers' Index for the manufacturing sector is likely to provide some initial impetus on Monday (16:00).
In the night from Monday to Tuesday, the Caxin PMI index for the manufacturing sector comes into focus (03:45), which could provide important guidance for trading on Tuesday.
The so-called "JOLTs" (Job Openings and Labor Turnover Survey) are on the daily agenda at 16:00. This data refers to all positions that are unfilled on the last working day of the month. Data is collected from around 16,400 non-agricultural companies.
ADP employment data in focus on Wednesday - ECB to decide on key interest rate level in eurozone on Thursday
A first appetizer for the Non-Farm Payrolls (NFPs) should usually be the ADP employment data (14:15).
Investors should also pay attention to the meeting of the European Central Bank (ECB) on Thursday. While the key interest rate decision is expected at 14:15, ECB President Christine Lagarde is expected to address the public at 14:45.
The European monetary watchdog could once again lower interest rates by 25 basis points, reducing the deposit rate from the current 2.25 percent to 2.0 percent.
Economists expect the non-farm job market to deteriorate compared to the previous month
The US labor market report is scheduled for publication on Friday (14:30). According to current estimates, non-farm payrolls are expected to increase by a total of 130,000 units, following 177,000 new jobs in the previous month. The unemployment rate is expected to remain at 4.2 percent. Investors should also pay attention to the development of average hourly wages.
In the ongoing reporting season, companies from the second and third tiers such as NIO, CrowdStrike and Hewlett Packard Enterprise will present their business figures for the past quarter on Tuesday.
Dow Jones Industrial Average Index
Source: IG trading platform
