FX Week Ahead: Busy week for AUD. Canada jobs in focus.

After a rather volatile week, especially since Wednesday and the continued narrative of the Italian political crisis, the week ahead will see investors turning their attention back to the fundamentals. The U.S. dollar takes a back seat this week with no major market moving events lined up.

A big week is in store for the Australian dollar which will see the release of the retail sales, RBA monetary policy meeting and the quarterly GDP numbers. No changes are expected from the RBA at this week’s meeting as investors focus on the quarterly GDP report which stands out.

Data from the UK will see the release of the PMI figures covering construction, manufacturing and services sector. Following a weak patch of data an uptick in the indicators could give the British pound a much needed lift.

Elsewhere, Canada will see the release of the trade balance figures followed by Friday’s jobs report. After the Canadian economy shed jobs last month in April, investors will be looking to see a rebound.

Here’s a quick recap of the economic events for the week ahead.

AUD: GDP, Retail sales and RBA meeting

The Australian dollar will see a busy week starting off early on Monday with the release of the retail sales report. Estimates point to a 0.4% increase in retail sales after the data for the previous month showed a flat change.

Later in the week, the RBA’s monetary policy meeting is scheduled. No changes are expected to the RBA’s interest rates this week. The central bank is also expected to maintain its statement unchanged while it waits for further evidence of a pickup in wage growth and inflation.

The GDP report will of course remain the key data point of interest for investors. The GDP report covers the first quarter of the year. Estimates show that the Australian economy increased at a quarterly pace of 0.6%. This marks a slight uptick in activity after the previous quarter’s GDP data increased 0.4%. On an annual basis, Australia’s GDP is expected to advance to 2.5% up from 2.4% previously.

UK: Construction and services PMI

In the UK, investors will be focusing on the monthly PMI figures covering the construction and services sectors. So far, data for the first month of the second quarter showed that the UK’s economy continued to slow. After the first quarter GDP was confirmed at 0.1%, the Bank of England also postponed its rate hike plans.

The week starts off with Monday’s construction PMI release. Forecasts point to a broadly unchanged print, although the construction activity is expected to slow once again. Preliminary forecasts point to manufacturing PMI falling to 52.1 in May after April registered a reading of 52.5.

The services PMI data is due on Tuesday and it is expected to show a rebound to 54.0 in May after registering 52.8 in April. This would mark a slow pace of recovery.

CAD: Rebound expected in Canadian jobs

On Friday, Statistics Canada will be releasing its monthly jobs report. According to the economists polled, the Canadian economy is forecast to see another weak month as the economy is expected to shed 6k jobs during May. This follows April’s decline of 1.1k and would mark a second consecutive monthly decline.

Full time employment is also forecast to drop 21k on the month following an increase of 28k the month before. This could potentially signal some lost momentum in the job growth.

The Canadian unemployment rate is also forecast to increase to 5.9%, up from 5.8% previously. The unemployment rate was steady for three consecutive months ending April 2018.