What are we focusing on this week

With a lack of major economic reports and earnings news in the coming week, markets could focus more heavily on trade-related headlines as President Donald Trump prepares to meet world leaders at the G7 summit in Canada.

There could be major developments on the trade front with China during the coming week, as well, and more clarity on whether revisions to the North American Free Trade Agreement can be concluded before a looming deadline.

Staying on the subject, market participants will focus on monthly trade figures out of the United States and China, as they seek to gauge if there has been any impact on trade activity from the recent trade dispute between the world's two largest economies.

In the UK, investors will focus on a report on activity in the dominant services sector for further indications on the health of the economy and the likelihood of the Bank of England raising interest rates this year.

On the central bank front, a monetary policy announcement from the Reserve Bank of Australia will be in the agenda, though no change is expected.

1. G7 Summit

The heads of G7 nations travel to Quebec at the end of the week for a meeting hosted by Canadian Prime Minister Justin Trudeau.

President Trump is expected to arrive on Friday, where he will meet the leaders of Germany, Italy, France, UK, and Japan, all countries subject to U.S. tariffs.

2. Reserve Bank of Australia Policy Meeting

The Reserve Bank of Australia's (RBA) latest interest rate decision is due on Tuesday at 0430GMT.

Most economists expect the central bank to keep rates unchanged at the current record-low of 1.5% for the 21th straight meeting, which would be the longest spell of inactivity since 1990.

3. UK Services PMI

A survey on Britain's giant services sector due at 0830GMT (4:30AM ET) on Tuesday is forecast to inch up to 52.9 from the previous month's reading of 52.8.

A separate PMI for the construction industry is due on Monday.

Growth among British manufacturers picked up speed in May for the first time in six months, but the improvement masked underlying weakness among the country's factories, a survey showed on Friday.

Britain's economy grew more slowly than most of its peers in the first quarter of 2018 due to a mix of unusually snowy weather and headwinds from Britain's impending exit from the European Union.

The Bank of England is watching for signs that weak growth at the start of the year was temporary and caused by unusually cold weather - rather than the approach of Brexit next year - before it raises interest rates for only the second time in over a decade.

4. U.S. Trade Data

The U.S. Commerce Department will release international trade data for April at 8:30AM ET (1230GMT) on Wednesday, and it will be watched closely amid the threat of a global trade war.

The deficit is forecast to widen to $50.0 billion, from $49.0 billion in March.

There is also productivity and costs data, due on Wednesday, which includes a look at inflation. The PCE data is the preferred inflation measure watched by the Federal Reserve.

5. China Trade Figures

China is to release May trade figures on Friday morning.

The report is expected to show that the country’s trade surplus rose to $32.5 billion last month from $28.8 billion.

Exports are forecast to have climbed 6.3% from a year earlier, while imports are expected to rise 16.0%.

Trade figures released last month showed that China's exports rose sharply despite the heated trade dispute with the United States.

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