3 numbers to watch: UK PPI, CAD Employment & US Trade Balance

With neither the ECB's Draghi nor the Fed's Bernanke offering much to the markets, stocks sold off and the S&P 500 managed to close in the red despite the ebullience of risk appetite in the early European session. Today gives market participants extra time to rifle through the speeches and Q&As of said central bankers given the somewhat empty calendar. However, we have dug out three numbers worth watching.

• May UK PPI Output (08:30 GMT) to continue its deceleration? The UK economy struggles, like the stagnant Eurozone, for traction as cost cutting and private sector rebalancing make their mark on the consumers. This is also reflected in prices, which are slowly, but steadily, rising at a slower pace after a rather sticky trip north of 3%. CPI stands at 3% while today's PPI Output slowed to 3.3% in April and consensus looks for another (small) deceleration to 3.2% in today's May report. The less volatile core series is seen unchanged at 2.3%. We expect this, too, to decline further over the coming months.

• May Canadian Change in Employment (12:30) to show slight gain after April's massive display? Canada's labour market has been on a tear recently, with gains of 82,300 and 58,200 in March and April, respectively, after a mild-tempered start to the year. Consensus is less positive about today's May report, in which employment is seen up 5,000. Clearly it will in general be difficult for an economy the size of Canada to maintain the rapid change seen over the past couple of months, and in addition the slowdown in its Southern neighbour is also bound to make a mark. The consensus estimate seems reasonable - and we may even see employment overshoot to the downside. The unemployment rate is expected to stay at 7.3%.

• Apr. US Trade Balance (12:30) to show a narrowing deficit: The first Q2-related trade data is expected to show a narrowing trade deficit of $49.5 billion from 51.8 billion a month earlier, which would get this part of the US economy off to a positive start. The widening trade deficit observed since the Great Recession of 2008-09 has kept a lid on growth (particularly in 2010) and both 4Q'11 and 1Q'12 have seen negative contributions to GDP (of 0.26 and 0.08pp, respectively).*

* Keep an eye out for US Wholesale Inventories as well. Inventories failed to rise much in the first quarter, which resulted in a fairly small contribution of just 0.21pp to GDP after 1.81pp in Q4. The April report is out at 14:00.