ECB Rate Cut and U.S. Labor Data Take Center Stage Amid Signs of Global Policy Shift

The Week Ahead: Week of 2nd June 2025 (GMT+3)

Weekly Market Preview
A dense calendar of U.S. macroeconomic releases will guide global sentiment this week, as investors look to assess the durability of American job growth and service sector activity. Wednesday’s ADP report and Friday’s Nonfarm Payrolls will be pivotal in gauging the pace of U.S. labor market normalization. Elsewhere, the ECB is widely expected to deliver another interest rate cut, following confirmation of cooling headline inflation in the Eurozone. In Canada, the BoC meets amid growing expectations for a dovish pivot. Together, these events will help shape the trajectory of global monetary policy heading into the second half of the year.

Key Events to Watch:

Monday, June 2 – 17:00
U.S. ISM Manufacturing PMI (May)
Previous: 48.7 | Forecast: N/A | Actual: N/A
Following a sub-50 print in April, markets expect the ISM Manufacturing PMI to remain in contraction territory. Should the index drop further, it would highlight deepening pressure on industrial production and strengthen calls for monetary easing later this year. A surprise rebound above 50, however, could delay Fed rate cut expectations and provide near-term support for the U.S. dollar.

Tuesday, June 3 – 12:00
Eurozone CPI (YoY) (May)
Previous: 2.2% | Forecast: N/A | Actual: N/A

Annual inflation in the Eurozone stood at 2.2% in April, aligning with the ECB’s medium-term target. If May data confirms disinflation is continuing, it could strengthen the case for a June rate cut. A reacceleration, however, may prompt the ECB to adopt more cautious forward guidance.

Tuesday, June 3 – 17:00
U.S. JOLTS Job Openings (Apr)

Previous: 7.192M | Forecast: N/A | Actual: N/A

Job openings fell to 7.192 million in March, signaling a slow but steady cooling in labor demand. A further drop would support the case for a soft-landing scenario and likely bolster expectations of a Fed rate cut by late summer. A surprise uptick could dampen easing hopes.

Wednesday, June 4 – 15:15
U.S. ADP Nonfarm Employment Change (May)
Previous: N/A | Forecast: N/A | Actual: 62K

The private sector added only 62,000 jobs in May, suggesting significant labor market softening. With no prior data for comparison, the print stands out as weak, raising concerns ahead of Friday’s official jobs report. Continued weakness in employment would boost Fed cut bets and likely weigh on the dollar.

Wednesday, June 4 – 15:45
Canada BoC Interest Rate Decision
Previous: 2.75% | Forecast: N/A | Actual: N/A

The BoC last held its rate at 2.75%, citing concerns over weak growth and easing inflation. If the central bank strikes a dovish tone or signals further cuts, CAD could come under renewed pressure. A surprise hawkish tilt would offer support to the loonie amid diverging global policy paths.

Thursday, June 5 – 15:15
ECB Interest Rate Decision (June)
Deposit Facility Rate: Previous: 2.25% | Forecast: N/A | Actual: N/A
Main Refinancing Rate: Previous: 2.40% | Forecast: N/A | Actual: N/A

The ECB is widely expected to lower its key interest rates by 25 basis points, initiating a dovish shift in response to declining inflation. Markets will focus on the tone of the accompanying statement and whether the Governing Council signals further cuts. A conditional approach tied to services inflation and wage dynamics could temper euro downside.

Friday, June 6 – 15:30
U.S. Average Hourly Earnings (MoM) (May)
Previous: 0.2% | Forecast: N/A | Actual: N/A

Wage growth remains a critical driver of core inflation. Another 0.2% increase would indicate moderation, aligning with the Fed’s goal of reducing inflationary pressures. However, a surprise uptick could reignite concerns about wage-driven inflation and delay expectations for monetary easing, particularly if paired with a strong jobs figure.

Friday, June 6 – 15:30
U.S. Unemployment Rate (May)
Previous: 4.2% | Forecast: N/A | Actual: N/A

The unemployment rate rose to 4.2% in April, indicating that slack is emerging in the labor market. A further increase could add momentum to Fed rate cut expectations. A decline back toward 4.0% would complicate the case for imminent easing and support the dollar.