Change in Non-farm Payrolls (MAY)(12:30 GMT, 8:30 EST)
Consensus: 170K
Previous: 138K

Outlook: All eyes are on the change in non-farm payrolls for May, arguably the most anticipated release of the week.  Employers are expected to have added 170,000 jobs during the past month, an improvement over Aprilââ,¬â"¢s disappointing result.  Growth in employment and wages will help the American consumer overcome high energy costs, high borrowing rates, and a cooling housing market.  Although consumer spending may moderate under budgetary pressures from sustained near-record high oil prices, it can still positively contribute to the slowing economy.  Another disappointment in this release could be extremely negative for the dollar.  A weak employment market will add to economic woes as consumers will be even more strapped and a number too low could actually put the next planned interest rate hike in jeopardy.

Previous: Non-farm payrolls rose a mere 138K during April, disappointing markets and pushing the dollar down.  The short fall to expectations, which called for a 200K rise, was emphasized by a downward modification of the March figure.  It is the smallest reading since October 2005.  The lackluster employment figure sparked some speculation that the Fed may be able to pause in its rate-raising streak, causing a dollar negative reaction.  A weaker employment market would put less upward pressure on wages and therefore less pressure on inflation and would also slow consumer spending which fuels a large part of economic growth.

US Factory Orders (APR)(14:00 GMT, 10:00 EST)
Consensus: -1.5%
Previous: 4.2%

Outlook: New orders for goods manufactured in the United States are expected to have fallen off by 1.5 percent during April after a huge spike in the month of March.  Some of this fall is likely just a retraction after the incredibly high number of orders in March, but also there has been some evidence of weakening in the manufacturing sector.  Spending was down in general in April as oil hit record price highs and crunched business and personal spending alike.  Also the persisting interest rate hikes will begin taking a toll on spending for higher capital goods such as airplanes and machinery, which drove Marchââ,¬â"¢s order growth.

Previous: Factory orders jumped 4.2 percent in March from a 0.4 percent gain in February. This was the fifth rise in 6 months and the sharpest rise seen since May 2005.  The rise was led by increasingly heavy demand for airplanes, machinery, electronics, and petroleum.  This release was surrounded by a strong durable goods announcement for the same month and a rise in the ISM manufacturing survey for April, both indicating a strengthening factory sector.  The combination of all of the manufacturing data released around the same time, sparked expectations that the sector was healthy and any downturn would come from the consumer side, not the business side.

Richard Lee is a Currency Strategist at FXCM.