London, Sunday, 11 June 2023
Summary
The Fed interest rate decision, inflation rate, retail sales, and Michigan consumer sentiment will be the focal points of a busy week in the US. The monetary policy meetings of the European Central Bank and the Bank of Japan will be widely watched by investors. In addition, data on China's retail sales, fixed asset investments, and industrial production will be released, while India will report its inflation rate and industrial production figures. The UK's trade balance and GDP for April, Australia's consumer and business confidence, and Germany's ZEW Business Confidence are among the other significant announcements.
US
The Federal Reserve's decision on June 14th and the FOMC's updated economic estimates will be the main events of this week in the United States. The market presently assigns a 77% probability that the Fed will keep interest rates where they are, but the announcement of the inflation rate the day prior may alter those estimates. According to forecasts, the US inflation rate will decrease to 4.1% in May from 4.9% in April, while the core gauge may slow to 5.2% from 5.5%. However, a 0.1% decline in retail sales is anticipated.
Other noteworthy figures include those on producer and export trade prices, industrial production, a preliminary reading of Michigan consumer sentiment, total capital flows, company inventories, and government budget numbers for May. The Philadelphia Fed Manufacturing Index and the NY Empire State Manufacturing Index are only two examples of regional activity indices that will be highlighted. The housing starts in Canada and Brazil, as well as business confidence and retail trade data from the latter country, are important indicators outside of the US.
Europe and UK
The ECB is anticipated to increase interest rates in Europe by 25 basis points, and investors will be on the lookout for signs of upcoming rate adjustments after learning the Eurozone economy has entered a recession. Additionally, May's consumer price inflation is forecast to be revised up to 0.3% month-over-month. The ZEW Indicator of Economic Sentiment in Germany is expected to drop for the fourth time in a row, hitting a six-month low.
The monthly GDP data for the United Kingdom are projected to show a recovery in April, but the unemployment rate is expected to rise to 4% and the average annual wage growth to reach 6.9%. Inflation reports from Germany, France, and Italy are also important, as are other essential figures including wage growth, the trade balance, and industrial activity in the Euro Area; Germany's wholesale prices; Turkey's unemployment rate; and Spain's and Italy's international trade.
Asia
All eyes in China will be on May's industrial production, fixed investment, retail sales, and labour data to gain more understanding of the slow-moving economic recovery there. Investors will be on the lookout for signs of a potential turnaround down the road, but the Bank of Japan is anticipated to maintain its current dovish policy stance in the interim. The trade balance for Japan for May will also be disclosed. Retail inflation in India is anticipated to stay significantly below the RBI's upper target of 6%. Additionally, traders are anticipating the trade balance for May and the industrial production for April. Philippines and South Korea will also provide their labour statistics.
Australia
In Australia, the Westpac Consumer Confidence for June and the NAB Business Confidence for May will be the two most important releases. In addition, investors will examine a collection of labour market information for May and forecasts for June's inflation to gain insight into the RBA's policy stance in the wake of its most recent surprise rate increase.
(Research and edit by: The Decision Maker - Finance and International Relations editors)