On Monday 10th: No important news.
On Tuesday 11th: Australian NAB Business Confidence and UK Unemployment Rate
On Wednesday 12th: Chinese Inflation Rate YoY, UK GDP MoM, American Core Inflation Rate YoY, American Inflation Rate YoY, American Fed Interest Rate Decision
On Thursday 13th: Australian Westpac Consumer Confidence Change and American PPI MoM
On Friday 14th: Japanese BoJ Interest Rate Decision and American Michigan Consumer Sentiment Prel
Tuesday 11th of June
The National Australia Bank (NAB) business confidence index held steady at 1 point for the second consecutive month, which usually indicates a continued lack of strong optimism among businesses. Additionally, the index remains below its historical average. Australia's business confidence data scheduled for release at 1:30 AM GMT.
The UK unemployment rate edged slightly higher in the first quarter of 2024, rising to 4.3%. This marks a small increase from the previous quarter's 4.2% and represents the highest level since mid-2023. Market participants expect the unemployment rate for April to remain unchanged at 4.3% when the data is released at 06:00 AM GMT.
Wednesday 12th of June
China's consumer prices ticked upwards in April 2024, with the annual inflation rate rising to 0.3% from 0.1% in March. This marks the third consecutive month of inflation with domestic demand recovering amidst a fragile economic rebound. While this slight uptick suggests a potential for a gradual rise in prices, it will be interesting to see if this trend continues in May. Market participants are closely watching for the release of the next inflation data scheduled for 1:30 AM GMT.
The UK economy outperformed expectations in March 2024, with GDP (Gross Domestic Product) expanding by a robust 0.4% month-over-month. This marks a significant improvement from the upwardly revised 0.2% growth recorded in February and exceeds initial forecasts of just 0.1%. In fact, it represents the strongest performance for the UK economy in nine months. Set for release at 6:00 AM GMT, market forecasts suggest a potential slowdown in GDP growth, with a decrease to 0.2% month-over-month in April.
Underlying inflation in the United States showed signs of further cooling in April 2024. The core Consumer Price Index (CPI), which excludes volatile items like food and energy, dipped to a three-year low of 3.6%. This represents a welcome decline from the 3.8% reading observed in March. The data, to be released at 12:30 PM GMT, is expected to show May's core inflation rate holding steady at 3.6%.
Just like core inflation, headline inflation in the United States showed tentative signs of moderation in April 2024. The annual inflation rate dipped slightly to 3.4%, down from a March reading of 3.5% - the highest since September 2023. This decline aligns with market expectations, suggesting a potential easing of price pressures. For May, when the data is released at 12:30 PM GMT, market participants predict that the inflation rate might hold steady at 3.4%.
The minutes from the latest Federal Open Market Committee (FOMC) meeting shed light on the Fed's evolving stance on inflation. While policymakers remain committed to their long-term goal of 2% inflation, recent economic data hasn't bolstered their confidence in achieving it as quickly as initially anticipated.
The minutes revealed concerns that the disinflation process, the gradual decrease in inflation, might take longer than expected. Some officials even expressed a willingness to tighten monetary policy further if inflationary pressures intensify. Despite these concerns, the FOMC members acknowledged the continued strength of the US economy, reflected in intermeeting data. This economic performance justified maintaining the current federal funds rate target range of 5.25% to 5.50%.
Following this logic, the Fed opted to keep interest rates unchanged for the sixth consecutive meeting in May, and this trend is likely to continue when the next interest rate decision is announced at 6:00 PM GMT. In simpler terms, the Fed is taking a wait-and-see approach, adjusting its policy stance if inflation deviates significantly from its target.
Thursday 13th of June
Australia's consumer confidence dipped slightly in May 2024, marking the third consecutive month of decline. The Westpac-Melbourne Institute Consumer Sentiment index fell 0.3% month-over-month to 82.4, a softer decline compared to April's 2.4% drop. This comes just after the announcement of the country's budget by Treasurer Chalmers, which aimed to boost employment and alleviate cost-of-living pressures.
Despite the downward trend, there seems to be a glimmer of hope. The decrease in May was less severe than the previous month, suggesting a potential slowdown in the decline of consumer confidence. Market participants' forecast for June is a modest increase of 0.4% when data is released at 12:30 AM GMT. This suggests they believe the recent budget measures might start to have a positive impact on consumer sentiment.
Prices at the factory level in the US rose unexpectedly in April 2024. Producer Price Inflation (PPI) jumped 0.5% month-over-month, exceeding initial forecasts of 0.3%. This comes after a downward revision to March's data, which showed a smaller decline of 0.1% than previously reported.
This increase suggests that price pressures might be persisting in the US economy. However, market participants are anticipating a potential slowdown in May. Their predictions, set for release at 12:30 PM GMT, suggest a decrease in PPI to 0.2% month-over-month. This indicates they might believe the recent uptick could be temporary.
Friday 14th of June
The Bank of Japan (BOJ) hinted at a potential shift in its monetary policy stance in a summary of its April meeting. While the central bank reaffirmed its commitment to accommodative financial conditions for now, it acknowledged emerging risks to inflation.
The BOJ highlighted several factors that could push inflation upwards, including faster-than-anticipated wage growth, a weakening yen, robust government spending, and ongoing labour shortages that limit supply capacity. Additionally, rising commodity prices add further fuel to inflationary pressures.
However, the BOJ also acknowledged that economic activity and inflation forecasts could necessitate raising interest rates in the future. Key factors it's watching include positive corporate behaviour (potentially indicating increased investment) throughout summer and an uptick in consumer spending.
The Ministry of Finance echoed concerns about weak consumer spending and urged the BOJ for close collaboration to achieve a sustainable inflation rate of 2%. Despite these discussions, no significant changes are anticipated in the upcoming interest rate decision scheduled for release at 4:00 AM GMT.
Consumer sentiment in the US showed some signs of improvement in May 2024, although it remains relatively low. The University of Michigan's consumer sentiment index was revised upwards to 69.1, slightly higher than the initial estimate of 67.4. However, this still marks the lowest level for the index in six months.
Market participants’ forecasts for June predict a further rise in the preliminary University of Michigan consumer sentiment index to 70 when the data is released at 2:00 PM GMT. This suggests they believe consumer confidence might continue its slow upward trajectory.
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