With a volatile month in the stock market coming to an end, investors will be looking forward to Friday’s U.S. non-farm payrolls report, which could help set the tone for the market in June. Recent encouraging economic data has raised hopes that the U.S. Federal Reserve will be able to tighten monetary policy without plunging the economy into recession. Investors will also pay attention to China’s PMI data amid growing concerns about the economic outlook for the world’s second largest economy, which has been hit by COVID-19 restrictions. Meanwhile, eurozone inflation data due for release on Tuesday is expected to hit a new record high, reinforcing expectations that the European Central Bank will begin its own rate hike cycle. Here’s what you need to know at the start of the week.

1. NONFARM PAYROLLS

Friday’s U.S. non-farm payrolls data for May is expected to show that the labor market remains robust, with economists expecting the economy to have added 320,000 jobs in May, up from 428,000 in April. While this figure is still solid, it will mark the smallest job growth in about a year.

Wage growth is expected to remain steady amid labor shortages and the unemployment rate is expected to fall to 3.5%.

The economic calendar will also feature private sector hiring and job openings data from JOLTS, a closely watched indicator of labor market demand, as well as weekly initial jobless claims data.

ISM data on U.S. manufacturing and service sector activity will be in focus amid concerns about the impact of rising prices and supply chain issues. A report on consumer confidence will also be released.

2. WILL THE STOCK MARKET EXTEND THE RECOVERY?

The US stock market rallied on Friday as all 3 major indices snapped their longest weekly losing streak in decades after better-than-expected economic data boosted hopes that the Federal Reserve may not need to tighten its monetary policy as much as previously feared.

Data on Friday showed that consumer spending rose more than expected in April and also pointed to a slowdown in inflation.

The consumer spending data came after minutes from the Fed’s May meeting, released last Wednesday, showed that a number of officials believed “monthly data may indicate that overall price pressures may no longer be building.”

The Fed has raised the interest rate by 75 basis points this year, and the market expects 50 basis point rate hikes in June and July.

Some market analysts believe concerns about the economic impact of a higher rate at a time when inflation may have peaked mean the central bank may pause the tightening cycle in September.

Stock indexes in the U.S. are closed Monday in observance of Memorial Day.

3. FRS SPEAKERS

Investors will have the opportunity to hear from several Fed officials on the economic outlook this week.

Fed Governor Christopher Waller is scheduled to speak on Monday, while New York Fed Chairman John Williams and St. Louis Fed Chairman James Bullard, a well-known hawk, are scheduled to speak on Wednesday, with Cleveland Fed Chairman Loretta Mester scheduled to speak a day later.

On Wednesday, the Fed is also scheduled to release its latest Beige Book, which examines local economic conditions in each of the Fed’s 12 districts.

4. CHINA PMIS.

China’s economy showed signs of recovery this month from April’s slump, but activity was lower than last year and many analysts expect it to contract in the second quarter.

Investors are concerned about the lack of a roadmap to exit the country’s COVID-19 strategy, which runs counter to trends seen in other parts of the world.

Beijing will release forward-looking manufacturing and non-manufacturing PMIs on Tuesday and Wednesday, which economists expect to remain below 50, pointing to a one-month contraction in May.

China unveiled a broad package of measures aimed at stimulating the economy, with Premier Li Keqiang promising to release detailed instructions on how to implement them soon.

Shanghai is set to end its two-month quarantine on June 1, while Beijing on Sunday reauthorized some public transport as well as several shopping malls as the infection stabilized.

5. EUROZONE INFLATION

The Eurozone will release its latest inflation estimate on Tuesday; with economists expecting the Consumer Price Index (CPI) to hit another record high of 7.7% in May, up from 7.4% in April.

This will bolster hopes for policy normalization by the ECB, which is due to hold its next meeting on June 9.

Economists and market participants expect a quarter interest rate hike in July, but very high inflation figures could spark talk of a bigger move, which some ECB officials are already pushing for.

ECB chief Christine Lagarde has said the deposit rate should start to rise in July and could be at zero or “slightly higher” by the end of September before continuing to rise “towards a neutral rate.”