On Monday 24th: German Ifo Business Climate
On Tuesday 25th: Australian Westpac Consumer Confidence Change and Canadian Inflation Rate YoY
On Wednesday 26th: German GfK Consumer Confidence
On Thursday 27th: American Durable Goods Orders MoM and American GDP Growth Rate QoQ Final
On Friday 28th: French Inflation Rate YoY Prel, American Core PCE Price Index MoM, American Personal Income MoM and American Personal Spending MoM
Monday 24th of June
The Ifo Business Climate indicator remained unchanged at 89.3, missing market expectations of 90.4. This reading, although unchanged from a revised April figure, suggests a potential slowdown compared to previous months.
While the current conditions subindex declined, indicating that businesses were less satisfied with their immediate circumstances, there was a brighter outlook for the future. The business expectations subindex improved, suggesting that companies are optimistic about the coming months.
This optimism might be fueled by recovery in certain sectors. The manufacturing, trade, and construction industries appear to be on an upswing. However, the data also hints at a slight setback in the service sector.
Despite the mixed signals, market participants are leaning towards a more positive Ifo Business Climate indicator. Their forecasts for June predict a rise to 93 when the data is released at 8:00 AM GMT.
Tuesday 25th of June
Australian consumer confidence edged down slightly in May 2024, continuing a three-month trend of decline. The Westpac-Melbourne Institute Consumer Sentiment index dipped 0.3% month-over-month to 82.4, marking a slower pace of decline compared to April's 2.4% drop.
The 12-month and 5-year economic outlooks both improved, rising 0.7% and 2.6% respectively. Additionally, consumers expressed slightly more positive sentiment regarding their future financial situation.
Despite these improvements in future expectations, assessments of current conditions remained weak. Consumers reported a decline in their perception of their present financial situation. Westpac senior economist Matthew Hassan attributed this to "a further deterioration in current conditions and fears that persistently high inflation may require further interest rate rises."
Market participants expect the data to be released at 12:30 AM GMT in June with a smaller decline in consumer confidence of 0.1%.
Consumer prices in Canada showed signs of cooling in April 2024. The annual inflation rate dipped to 2.7%, down from 2.9% in March. This marks the lowest inflation rate since March 2021, aligning with the Bank of Canada's (BoC) projections.
The BoC anticipated inflation to hover around 3% in the first half of 2024, gradually declining to below 2.5% in the latter half. This recent slowdown reinforces their view that interest rate cuts might be on the horizon – a potential signal welcomed by many.
Month-over-month, the Consumer Price Index (CPI) rose by 0.5% in April. Released at 12:30 PM GMT, the data will be closely monitored by market participants as they assess the trajectory of inflation in Canada and its potential impact on future monetary policy decisions.
Wednesday 26th of June
German consumer confidence showed tentative signs of improvement heading into June 2024. The GfK Consumer Climate Indicator climbed to -20.9, up from a slightly revised -24.0 in May. This marks the highest level since April 2022 and represents the fourth consecutive month of improvement.
Income expectations surged to their strongest level in two and a half years, suggesting that consumers are feeling more confident about their future financial situation. Economic prospects also brightened, with positive sentiment regarding the economy rising for the fourth month in a row. This improved outlook on both personal finances and the broader economy led to a sharp decline in the tendency to save, indicating a potential willingness to spend more. However, the propensity to buy, which reflects current spending habits, remained relatively unchanged.
Looking ahead, market participants still believe about a further uptick in consumer confidence. Their forecasts for July predict a rise to -19.5 on the GfK Consumer Confidence index when the data is released at 6:00 AM GMT.
Thursday 27th of June
In a surprising turn of events, new orders for durable goods in the United States rose for the third consecutive month in April 2024. This 0.7% increase defied market expectations of a decline and follows a downward revision to March's data (previously reported as -0.8%).
The growth appears to be driven by a strong demand for transportation equipment, a positive sign for the manufacturing sector. Additionally, there was an increase in orders for computers and electronics, fabricated metal products, machinery and electrical equipment, appliances, and components. This broader upswing suggests potential growth across various manufacturing segments.
Business investment also showed tentative signs of improvement. Orders for non-defense capital goods excluding aircraft, a key indicator of business spending plans, rose by 0.3% in April, reversing a slight dip in March. This suggests that businesses might be cautiously increasing their spending on equipment, potentially in anticipation of future growth.
However, market participants are adopting a more cautious view for May. Their forecasts predict a decline in durable goods orders to 0.3% when the data is released at 12:30 PM GMT. This suggests they believe the recent upward trend might not be sustainable, and a slight pullback could be on the horizon.
The US economy grew at a slower pace than initially expected in the first quarter of 2024. The final reading for GDP growth came in at an annualized rate of 1.3%, down from the advance estimate of 1.6% and significantly lower than the robust 3.4% growth recorded in the previous quarter. This slowdown aligns with market forecasts and marks the weakest economic performance since the contractions experienced in the first half of 2022.
Several factors contributed to this moderation in growth. Consumer spending, the largest driver of the US economy, grew at a slower pace than previously anticipated. This weakness was observed in both goods and services consumption,indicating a potential pullback in consumer demand. Additionally, businesses accumulated less inventory than initially estimated, further dampening economic activity.
However, there were some bright spots in the data. Non-residential investment, particularly in structures and intellectual property products, was revised upwards. While investment in equipment grew at a slower pace, residential investment saw a more significant increase. Government spending also received a slight upward revision. Finally, both exports and imports rose at a stronger pace than previously estimated.
Despite these positive revisions in other areas, the overall picture remains one of a sluggish economy. Market participants, anticipating the final confirmation of this slowdown, have already factored in a 1.3% growth rate for Q1 2024 when the data is officially released at 12:30 PM GMT.
Friday 28th of June
Inflation in France took a slightly unexpected turn in May 2024. Initial estimates suggested a continuation of the downward trend, but revised data revealed an uptick in the annual inflation rate to 2.3%. This is a modest increase compared to April's two-and-a-half-year low of 2.2%.
The rise in inflation stemmed primarily from a reversal in food price trends. After thirteen consecutive months of slowing costs, food prices saw a rebound, particularly for fresh produce. Energy costs also accelerated, driven by a surge in petroleum product prices. These increases were partially offset by a decline in service sector inflation and stable prices for manufactured goods.
Interestingly, the monthly Consumer Price Index (CPI) remained flat in May, following a 0.5% rise in April. This is because the decrease in energy costs counterbalanced the increase in food prices.
Looking at the EU-harmonized figures, a similar pattern emerges. The annual inflation rate rose to 2.6% from 2.4% in April, but remained lower than the initial estimate of 2.7%. The monthly rate also eased slightly to 0.1% from 0.6%,falling short of the preliminary figure of 0.2%.
Based on this data, market participants anticipate a further increase in the French inflation rate for June with a rise to 2.5% when the data is released at 6:45 AM GMT.
Inflation in the United States showed signs of further moderation in April 2024. The core Personal Consumption Expenditures (PCE) price index, a key measure watched closely by the Federal Reserve, rose by just 0.2% from the previous month. This is the slowest increase so far this year and falls short of market expectations of a 0.3% rise.
The headline PCE index, which includes food and energy prices, also remained subdued, rising by 0.3% for the third consecutive month. This suggests that overall inflation pressures might be easing slightly.
On an annual basis, headline inflation stayed at 2.7%, marking a four-month high, while the core rate edged down to 2.8%. This represents the lowest core inflation reading since March 2021.
Looking ahead, market participants are anticipating a further decline in the core PCE price index for May when the data is released at 12:30 PM GMT. This aligns with the recent trend of slowing inflation.
The growth of personal income in the United States showed signs of moderation in April 2024. It rose by 0.3% from the previous month, reaching $23.234 trillion. Analysts forecast a slight acceleration in personal income growth to 0.4% when the data is released at 12:30 PM GMT.
Consumer spending in the United States continued to lose momentum in April 2024. Personal spending edged up by just 0.2% from the previous month, marking the slowest pace since January. This falls short of market expectations of a 0.3% increase and represents a significant slowdown compared to the downwardly revised 0.7% rise in March.
The weakness in spending is even more concerning when considering inflation. After adjusting for price increases, real consumption expenditure actually declined by 0.1% in April. This suggests that Americans are cutting back on the amount of goods and services they purchase, even as headline numbers show a slight increase in spending.
To be released at 12:30 PM GMT, market participants expect a slight acceleration in personal spending growth to 0.3%.
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