| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 01:30 | Australia | Gross Domestic Product (QoQ) | Quarter I | 0.2% | 0.2% | 0.1% |
| 01:30 | Australia | Gross Domestic Product (YoY) | Quarter I | 1.5% | 1.2% | 1.1% |
| 01:45 | China | Markit/Caixin Services PMI | May | 52.5 | 52.6 | 54.0 |
During today's Asian trading, the US dollar rose moderately against major currencies, retreating from its lowest level since April 9, reached yesterday after the publication of the JOLTS job openings report.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.15% to 104.27. Investors are adjusting their positions ahead of today's publication of employment data from ADP, as well as Services PMI’s. Economists expect that in May the number of employed rose by 180 thousand after an increase of 192 thousand in April. In addition, the S&P Global Services PMI is forecast to rise to 54.8 in May from 51.3 in April, and the ISM Non-Manufacturing index increased to 50.5 from 49.4. These data will allow for a better assessment of the current state of the economy and provide clues about the Fed's next actions. The Fed is now in the so-called blackout period ahead of its June meeting, during which officials are limited in what they can discuss publicly. According to the CME FedWatch Tool, markets see a 16.5% probability of a 25 basis point rate cut at the Fed meeting in July, a 64.9% probability of a rate cut in September, and a 76.4% probability of monetary policy easing in November.
The Australian dollar rose 0.2% against the US dollar, as the Australian data almost coincided with economists' forecasts. The Australian Bureau of Statistics said that in the 1st quarter, GDP grew by 0.1%, just under market forecasts of 0.2%. Annual growth dropped to 1.1%, from 1.5% the previous quarter and the slowest pace in three decades outside of the pandemic. Economists had expected GDP growth of 1.2%. Growth in household spending, which accounts for half of GDP, was only a fraction firmer at 1.3%. Most of that was on essential items such as electricity and healthcare, with discretionary spending almost flat for the year. Financial markets have already priced out any risk of a further hike in the RBA cash rate, but neither do they see much chance of a cut anytime soon. Futures imply around a 50-50 probability of a move in December and are not fully priced for a cut to 4.10% until May next year.