Global markets had a good session to end the week, boosted by solid US employment data and easing political tensions in Europe.

The US added more jobs than expected in May, while unemployment fell to an 18-year low and average hourly earnings edged higher to 2.7%.

That helped confirm that market’s view that the US Fed remains on track to continue its rate-hiking cycle this year.

The S&P500 gained 1% and benchmark US 10-year bond yields rose back above 2.9% following steep falls amid last week’s political uncertainty in Italy.

A political crisis has been averted for now, after the populist Five Star/League coalition received approval to govern on Friday. Italian stocks rose by 1.5%.

And stocks in Spain rose by 1.8% following the ousting of Prime Minister Mariano Rajoy due to a corruption scandal, with new elections expected later this year.

The Australian dollar ended the week mostly unchanged at 0.7568 US cents.

Looking ahead, it’s GDP week in Australia, with the report card on economic growth in the March quarter scheduled for Wednesday (11:30am AEST).

Australia

Markets will be closely watching the release of retail sales to start the week (Monday, 11:30am AEST), which will provide an update on the outlook for domestic consumption.

The median forecast is for monthly growth of 0.3% in April, but it will likely get more attention after the March print missed expectations.

Elsewhere, Wednesday’s GDP print is expected to show the Australian economy extended its growth streak in Q1.

Economists are forecasting growth of 0.8% in the March quarter, leaving the annual rate at 2.8%.

That’s up from 0.4%/2.4% in the three months to December, with the turnaround expected to be led by a pickup in net exports.

Markets will get a clearer picture of Wednesday’s print following the release of the usual GDP input data.

There’s company profits/inventory numbers on Monday, ahead of the Q1 current account balance along with the net exports component of GDP on Tuesday.

Also on Tuesday the RBA will make its monthly interest rate announcement.

With the bank’s rate policy settings firmly on hold at 1.5%, the accompanying statement will face the usual round of scrutiny as analysts look for any clues as to changes in the economic outlook.

Elsewhere, are Ai Group services PMIs on Tuesday and April trade balance data on Thursday, with markets forecasting a monthly surplus of $1 billion.

International

Globally, it’s a quieter week for key data and events to kick off June.

Following last week’s manufacturing data comes a huge wave of services PMIs for May on Tuesday, with updated prints for Japan, China, the US, UK and the Eurozone.

And amid the ongoing US-China trade rhetoric, April trade data for the US is on Wednesday night while China releases trade data for May is on Friday.

Then on Saturday, there’s inflation data out of China including both CPI and PPI figures for May.

Here’s the full calendar, via ANZ:

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