The first trading session of the third quarter is a heavy one for markets. Just one day ahead of the June employment figures, markets will get the closely watched ISM Manufacturing Index, the Pending Home Sales Index, the ADP private employment report, and more.  

Prior to any of the data, the U.S. dollar is looking weaker, but equities are poised to recover from the Tuesday sell-off, and WTI crude is up $1.50 to just under $72 per barrel.

“Today brings a raft of potential market-moving reports on employment, the industrial sector, and the housing market,” said Ian Shepherdson from HFE. “When the dust settles, we expect the data to support our view that the post-Lehman crash in activity is over, but we don’t expect to see unambiguous evidence that a real recovery is underway.”

He added: “That likely won’t stop the markets from taking the recovery view, however.”

Key Releases:

8:15 ― The ADP Employment survey reported private-sector losses of 532,000 jobs in May, therefore failing to anticipate the sharp reduction in the official figures. This month employers are anticipated to have cut another 363,000 jobs, but it’s unclear if the ADP numbers can do more than simply hint at the official figures.

However, analysts at RDQ note that not much forward-looking data on the labor front has been available to forecasters this month, so the report may garner some extra attention.

10:00 ― Until hard data is released in the Industrial Production report, the key index for U.S. Manufacturing is the ISM survey. Last month the index improved from 40.1 to 42.8, and the consensus looks for the index to hit 45.0 in June, just 5 points below the 50-threshold indicating growth. Forecasts are optimistic in part because the new orders component broke into growth mode last month.

Michael Feroli from JPMorgan Economics looks for 47.0 score this month. He noted that manufacturing output declined more than 15% in the 12 months ending in March, but a recent rebound in Asia points to a simultaneous recovery in the months ahead. 

“We expect this recovery to take off with a bang,” he wrote in a client note. “Global industry is projected to retrace roughly one-third of its recession losses by the end of the year, a development that would produce roughly 8% annualized growth during 2H09, rivaling the fastest pace of global output gains during the past two decades.”

10:00 ― It was unexpected when Construction Spending soared 0.8% in April, building on a 0.4% advance in March. Analysts expect some those gains to be pared back in May, with the consensus looking for a drop of 0.5%. However, forecasts range widely from -1.2% to +0.2%.

10:00 ― Pending Home Sales track home resales that have been signed but not finalized, thereby offering an advance look at the existing home sales index. However, not all sales get finalized, and last week the National Association of Realtors issued a press release condemning faulty appraisals, which they blamed for halting a recovery in real estate. The index is set to rise 1.1% in May following a 6.7% gain in April.