1. Japanese Labor Earnings
2. Swiss SVME PMI
3. Euro-Zone PMI Manufacturing
Japanese Labor Earnings (YoY) (MAY) (01:30 GMT; 21:30 EST)
Consensus: 0.6%
Previous: 0.4%
Outlook: The May Japanese Labor Earnings figure looks to extend three consecutive months of increases, furthering wage growth and serving as yet another indicator to the end of deflation in the land of the rising sun. The increase will also extend the 13 increases over the past 16 months. While wages have been increasing over the past year and a half, the number of employed has been decreasing, contributing to May's month over month decline in household spending and the year over year improvement from -2.0% to -1.8%. National CPI continues to charge ahead at 0.3% m/m and 0.6% y/y in May, which combined with sustained wage increases could be the final death toll of ZIRP.
Previous: After a revision up to 0.4% from 0.3% average wages for April rose to 282,571 yen, or $2,520, including overtime, bonuses and commuting costs. The increase could help household spending recover in the coming months. Wages are generally considered a good indicator of broader patterns, including spending and prices, and higher wages could not only boost those areas but also the economy as a whole. Consumer confidence in April was at a fifteen year high, with a seven-year low of 4.1% (until May's decrease to 4.0%). Skill shortages and an improving economic outlook have contributed to recent wage increases.
Swiss SVME Purchasing Managers Index (JUN) (07:30 GMT; 03:30 EST)
Consensus:
Previous:
Outlook: Strong Swiss economic conditions are expected to outweigh other concerns to post mild growth in manufacturing PMI after two consecutive declines. Despite oil still dancing at $70 and an interest rate hike from 1.25% to 1.50% earlier this month, and in spite of a slightly strong Swiss Franc, the 200 executives surveyed for the measure are expected to be optimistic about future growth. Economists predict a 2.0% growth rate for 2006, up from 1.9% in 2005, riding the gains posted in the first quarter, which had the fastest growth in over six years. Since then, however, stocks have dropped almost 6% and the economic boom has eased somewhat. The economy is still predicted to grow, but at a more measured rate.
Previous: Swiss Manufacturing PMI fell for a second straight month, although the March-April's drop was more reserved than the larger February-March decline. A combination of continued high oil prices, Swissie strength and rising interest rates contributed to the drop. The Swiss economy is coming off exceptionally fast first quarter growth which saw strong export strength on a slightly weaker Franc and increased demand in Europe, which accounts for some sixty percent of Swiss exports. Despite the slowdown analysts are still forecasting a 2.0% yearly growth rate, up from 1.9% in 2005. An interest rate rise from 1.00% to 1.25% in March (later rose to 1.50% in June) also contributed to slower growth. The numbers are still encouraging and are seen as more of a correction from the first quarter's unexpected surge in production.
Euro-zone PMI Manufacturing Survey (JUN) (08:00 GMT; 04:00 EST)
Consensus: 57.5
Previous: 57.0
Outlook: June PMI is expected to post a modest rise in line with the recent upward trend and furthering last month's six-year high. Recent German IFO Current Assessment for June posted a 15 year high at 109.4, up from 107.3 and beating expectations of a modest rise, and the rise in Expectations to 104.2 from 104.0 indicates strong future sentiment for Europe's largest economy. Although there has been a recent slowdown in Italy and France the broader Euro-Zone has seen strong improvement and looks for future growth. May output for manufacturing PMI rose to keep the indicator above the neutral 50 mark for a full year, with the trend supported by strong production and GDP growth for the first half of 2006.
Previous: Eurozone PMI hit the highest level in almost six years, as output prices rose at the fastest pace in survey history. The 57.0 mark for May is up from a 56.7 total in April and also the highest since August 2000. Germany continues to lead the way as it posted the biggest increase in the major European economies. This occurred despite input price inflation surging sharply higher, posting the fastest growth since November 2004, as metals and oil prices continued to rise or maintain high levels.
