- Eurozone Sentix Investor Confidence Index expected to tick higher in June
- Retail spending in the Eurozone ion track to increase again in April
- Economists say US job openings will tick lower in today’s update for April
Consumer spending in Europe is under scrutiny today with the monthly release of retail sales for April. We’ll also see new reports for the Eurozone Sentix Investor Confidence Index in June and US job openings in April.
Eurozone: Sentix Investor Confidence (0830 GMT): The rebound in economic activity this year is cheering investors, as today’s update on market sentiment for June will likely reaffirm.
Estimates of second-quarter GDP growth for the Eurozone continue to project that output will post another round of improvement. Last month’s release of the Euro-Coin Indicator, a proxy for GDP, reflected a 0.6% increase. That’s down from recent months, but it still represents an upgrade over the 0.5% rise in Q1.
Yesterday’s revised data for the Eurozone Composite PMI also anticipates faster growth in Q2. “The final PMI readings add to mounting evidence that the Eurozone is enjoying a strong second quarter, consistent with GDP rising at a 0.7% rate,” said the chief business economist at IHS Markit on Monday.
Equity markets in Europe this year have been forecasting a firmer macro trend. The Stoxx 50 Index, a blue-chip benchmark of Eurozone stocks, has been trending higher since December. Year to date through June 2, the index is up a solid 7.5%. The market may be getting ahead of itself, but as long as the economic outlook remains bright any pullback in equities will probably be contained.
Meanwhile, today’s monthly release of the Sentix Investor Confidence is expected to show that bullish sentiment will prevail for the foreseeable future. Investing.com’s forecast sees the benchmark for June edging up to 27.5, close to a 10-year high.
Eurozone Retail Sales (0900 GMT): Economists expect that today’s hard numbers on retail spending will support the view that economic activity is picking up.
TradingEconomics.com’s consensus forecast calls for a fourth month of increased consumption in April while the year-on-year increase looks set to hold above the 2% mark.
Shortly before today’s official numbers from Eurostat arrive, we’ll see a fresh review of sentiment for the retail sector in the May report for the Eurozone Retail PMI (scheduled for release at 0810 GMT).
TradingEconomics.com’s econometric estimates anticipates that the index will ease to 51.5, down from 52.7 in April. But that’s enough to keep the PMI above the neutral 50 mark for a second month. The positive bias for the sentiment suggests that the Eurozone’s recovery will roll on through the second quarter and beyond.
If today’s figures for hard data and sentiment match expectations (or only fall short of predictions by a slim margin), the news will reinforce the notion that the broad rebound for the euro area economy is self-sustaining with a decent chance of accelerating in the second half of the year.
US: Job Openings and Turnover Survey (1400 GMT): Job growth slowed in May, rising by 138,000, the second-softest monthly advance since October. But a broader measure of the labour market suggests that the outlook for job creation is still healthy.
The Conference Board’s (CF) Employment Trends Index, a composite of eight labour-market indicators, inched higher last month – a gain that translates to a robust 6.4% annual increase.
“While employment numbers have shown some softness in the past three months, there is no slowdown visible in the Employment Trends Index, suggesting solid job growth over the summer,” said the CF’s chief economist for North America. “Employment will likely grow fast enough to continue tightening the labor market.”
Today’s April release for job openings offers another data set for deciding if a rosy outlook is still warranted. Economists see a mild setback for openings, which are projected to ease to 5.725 million from 5.743 million in March. But the estimate is still close to the best level since last August – a sign that the near-term trend is still on track to remain in the black.
Disclosure: Originally published at Saxo Bank TradingFloor.com