Week ahead: Global services PMIs, EU inflation, US jobs data, OPEC+ meeting

A waitress carries a tray as she walks past customers as they sit on a cafe terrace in Perpignan, south-western France on May 19, 2021, as cafes, restaurants and other businesses re-opened across France after closures during the coronavirus (Covid-19) pandemic. - Patrons have made their way back to cafes and prepared long-awaited visits to cinemas and museums as France loosened restrictions in a return to semi-normality after over six months of Covid-19 curbs. Cafes and restaurants with terraces or rooftop gardens can now offer outdoor dining, under the second phase of a lockdown-lifting plan that should culminate in a full reopening of the economy on June 30. (Photo by RAYMOND ROIG / AFP) (Photo by RAYMOND ROIG/AFP via Getty Images)
Global services sector will be in focus this week as economies reopen. Photo: Raymond Roig / AFP via Getty Images

Investors are in for a shorter week as May comes to an end. Monday is a Bank Holiday in the UK, and the US also has a holiday, so, market activity will be on the slower side.

However, there is still plenty on the schedule as June kicks off.

First up, much of the focus will be on the final global services purchasing managers' index (PMI) figures for May, as economies reopen, and the biggest hit sector worldwide, regains its footing.

Britain and America have seen the most positive economic rebound in terms of services. UK services PMI is expected to improve to 62.2 as more business reopen in May, while US ISM services is forecast to remain steady at 62.7.

Manufacturing and construction PMIs are also due out for the UK and Europe.

There will also be a focus on the crypto market, after a volatile month, which saw a number of top tokens including Bitcoin (BTC-USD), ethereum (ETH-USD) and dogecoin (DOGE) plummet to record lows.

Elsewhere: The Organisation of Petroleum Exporting Countries and its allies (OPEC+) are due to hold their next monthly meeting on 1 June. It is yet unknown whether the 13 members will increase production or not. OPEC+ announced earlier this year that they would gradually increase supply to 2 million barrels per day (bpd). Analysts expect members to maintain the current plan, and increase the remaining 840,000 bpd in July.

For Sale estate agent sign displayed outside a terraced house in Crouch End, London
New mortgage approval data will be available in the UK. Photo: Getty

UK: Consumer credit, mortgage approvals, coronavirus in the spotlight

It is a subdued week for Britain in terms of economic data, with stock markets closed on Monday due to the May Bank Holiday.

Coronavirus and the final stage of the roadmap out of lockdown will be on everyone's minds. Especially after prime minister Boris Johnson put a damper on plans to fully reopen the economy on 21 June.

Johnson warned last Thursday that the Indian coronavirus variant could push back England's reopening, as the strain, first found in India spread rapidly in Britain.

"All eyes will be on the government’s decision" on the fourth step of the roadmap out of lockdown," said Alpesh Paleja, lead economist at the CBI. "As and when restrictions lift further, we shouldn’t lose sight of how fragile the situation will remain for some businesses, and the government will need to keep a watching brief of what support may need to continue."

Kicking things off on Tuesday, the final manufacturing PMI reading for May. This is followed on Wednesday by the net lending to individuals and mortgage approvals figures. With the final services PMI on Thursday and the construction PMI closing out the week on Friday.

Mortgage lending soared to a record high in March of £11.8bn ($16.7bn) just before chancellor Rishi Sunak extended the stamp duty holiday into the summer. Property prices and mortgage demand has remained robust since then, hitting levels last seen back before the financial crisis in 2009.

Watch:What does a Joe Biden presidency in the US mean for the global economy?

US: Non-farm payrolls, services and manufacturing PMIs, unemployment data

All eyes will be on the US non-farm jobs report out on Friday after April's disappointing results caught investors and markets off-guard.

There were expectations for 990,000 jobs to be added in April, building on the 916,000 gained in March. But, the figure for April came in at 266,000, with March’s number revised lower to 770,000.

Analysts say the lower number was probably due to the "generous boost to unemployment benefits as a result of the March stimulus package", comforting those who didn't return to the workforce.

"These benefits are likely to act as a considerable brake on the US labour market until they expire in September, at a time when vacancies are already at record levels of 8m," said Michael Hewson, chief analysts at CMC Markets. "This in turn could prompt an element of wage inflation, as employers attempt to entice workers back into employment by raising salaries."

Heading into Friday, estimates point to over 600,000 jobs to be added in May, while the unemployment rate is expected to slip back to 5.9% after unexpectedly increasing to 6.1% in April.

Outside of this, there is the ISM and final Markit manufacturing PMIs on Tuesday, followed by services PMIs on Thursday. Friday then also sees the latest factory orders data.

EU: Inflation, services PMIs, German unemployment numbers

a woman walks pass a big 50 percent sale sign in a retailer store  amid the Coronavirus lockdown in Cologne (Photo by Ying Tang/NurPhoto via Getty Images)
Retail sales figures are out on Friday. Photo: Ying Tang/NurPhoto via Getty Images

It is a busier week in the Eurozone this week, with a few releases on the slate.

In line with the rest of the Western world, the region wakes to its latest manufacturing PMIs on Tuesday, alongside the German unemployment change data.

Wednesday will see the region-wide PPI number. Then the services PMI on Thursday, and monthly retail sales on Friday.

Services were more positive for the zone's two biggest economies, Germany and France, with services rising above 50 for the first time since August last year for the latter.

Meanwhile, Spain's services sector also improved in April, rising to 54.6, while Italy’s activity was more subdued at 47.3, due to various COVID curfews and other restrictions.

"One of the main takeaways from previous reports has been sharp rises in prices paid or input costs which for now don’t appear to be completely being passed on," Hewson said. "Employment components have also seen a recovery as well, although business activity in Europe has been more subdued due to higher infection rates."

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