The Economic Calendar Fed Rate decision and policy meet will attract attention this week. The FOMC also will release an updated Summary of Economic Projections (SEP) to coincide with next week’s policy meeting. The Bank of Japan will also meet and the UK’s economic data will inform the Bank of England as it plans to cut interest rates.
Economic Calendar : The key data and events for this week.
Tuesday – U.K. Job numbers
- The economic calendar begins on Tuesday with the UK employment report as they try to assess whether wage pressures have eased fast enough to enable a Bank of England rate cut soon. The data should be 10.2,000 higher than the previous reading of 8.9,000. Average weekly wages without bonuses will remain at 5.7 percent.
- Both numbers can weigh a pound.
Wednesday – China, US CPI, UK GDP, Fed policy
- China’s consumer price index is scheduled to be released. The reading is expected to rise to 0.4 percent from 0.3 percent previously. PPI y/y is expected to recover from -2.5% previously to -1.5%. Both numbers could surprise the yuan.
- Meanwhile, UK GDP data for April will be released. The data is expected to show 0.0% after a strong increase of 0.4% in the first quarter. This could have a negative impact on the value of the pound.
- Elsewhere, the opposition Labor Party is due to publish its manifesto before the July 4 election. Although opinion polls show Labor in power under Prime Minister Rishi Sunak’s Conservatives, some business leaders doubt Labor can reverse Britain’s recent weak growth.
- After China and Great Britain, the reading market reacted strongly to US inflation figures for May, which are published just hours before the statement of the Federal Reserve.
- CPI m/m data is expected to remain unchanged at 0.3%, CPI m/m will cool by 0.1% from the previous 0.3%, while CPI y/m is expected to remain unchanged at 3.4%. . . Any signs of slowing inflation could bolster expectations for a tax cut, especially given signs of a weakening economy.
- The data could add to volatility ahead of Federal Reserve Chairman Jerome Powell’s post-meeting news conference.
- With the Federal Reserve leaving interest rates at 5.50% at the end of its two-day policy meeting, market watchers are instead focused on how many interests rates the authorities will announce until the end of 2024. the updated dot chart points to two likely 25-point cuts this year, compared to three in March.
- However, Friday’s jobs data showed that both job and wage growth accelerated in May, although the unemployment rate was higher, market expectations for a rate cut this year were muted, and the first rate cut is now expected in September.
Thursday – US Weekly Jobless claims, PPI
- US Core PPI will take place on Thursday which could add somewhat volatility in the market. The data is expected at 0.3% compare to 0.5% prior. While, PPI m/m is expected to come at 0.1% moderately lower from the previous 0.5%.
- In addition, The US Jobless Claims remains important release to check each week because it is a more up-to-date indicator of the state of the labor market.
- Initial claims are expected to come in at 222k this week, reduce from 229K previously.
Friday – Bank of Japan Policy
- The policy of the Bank of Japan will draw attention on weekend. Bank of Japan Governor Kazuo Ueda has already hinted at some kind of taper of the bank’s long-running quantitative easing program when the BOJ concludes its two-day meeting.
- On Thursday he said it would be appropriate to reduce still-massive bond purchases as the BOJ exits decades of stimulus, stressing policymakers will move “cautiously” on rate hikes after delivering its first rise since 2007 in March.
- Mizuho Securities sees a good chance of a 1 trillion yen ($6.4 billion) cut in monthly purchases to roughly 5 trillion yen per month, which could be weathered by bond markets.
- The market reacted strongly to US Prelim UoM Consumer Sentiment data. The data is expected to increase by 73.00 from previous 69.1 which could weight on the dollar.
Happy Trading!
Commodity Samachar
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