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Week Ahead

G7 finance ministers reached a historic agreement on Saturday to reform the global tax system ahead of the highly anticipated G7 leaders’ summit on 11-13 June 2021. Elsewhere, monetary policy meetings in the Eurozone, Canada and Russia will be keenly watched, as well as updated GDP figures for Japan, the Eurozone, the UK and South Africa. Other important releases include US and China inflation and foreign trade data; US and Australia consumer sentiment; Germany and India industrial output; and Japan current account.

G7 finance ministers reached a historic agreement on Saturday to reform the global tax system, saying they would back a minimum global corporation tax rate of at least 15%. The move is aimed at getting tech giants to pay fair share and will pave the way for a wider deal between G20 nations next month. Also, the heads of government of the world’s seven largest advanced economies, along with the EU and guest countries, will be meeting in Carbis Bay, Cornwall on 11-13 June 2021. The meeting will be President Biden and Prime Minister Suga’s first G7 summit and is expected to be Chancellor Merkel’s last before she departs her role.

In the US, the consumer price report for May will probably show the inflation rate rising to 4.6 percent, the highest since September 2008 and well above the Federal Reserve’s target of about 2 percent. At the same time, the preliminary estimate of Michigan consumer sentiment for June will likely show a slight improvement in morale from May’s three-month low. Other notable publications include foreign trade, JOLTs job openings, the government’s monthly budget statement, and the final reading of wholesale inventories.

Elsewhere in America, central banks in Canada and Chile will be deciding on monetary policy. Important data to follow include Canada foreign trade; Mexico inflation rate and industrial output; Brazil retail trade and consumer prices; and Chile trade balance and inflation data.

Across the Atlantic, investors await the release of UK monthly GDP figures, which will probably show an unprecedented expansion in Britain’s economy during April, buoyed by record gains in industrial and construction output. Foreign trade balance data and Halifax house prices will also be in the spotlight.

Elsewhere in Europe, the ECB will deliver its latest monetary policy decision, with markets anticipating no changes in borrowing costs, despite the recent jump in consumer prices. Inflation in May hit its highest level since October 2018, while policymakers already said cost pressure was expected to be temporary. Regarding the economic calendar, key releases include the Eurozone final estimates of first-quarter GDP growth and employment change; Germany investor morale, foreign trade, industrial production and new orders; France and Spain industrial activity; Italy retail sales and industrial output; Switzerland jobless and inflation data; and Turkey unemployment rate and industrial production. Central banks in Russia and Poland will be deciding on interest rates.

In Asia, China will be publishing inflation data and trade figures, which will probably show another sharp increase in both exports and imports. Elsewhere, Japan’s key data include the final reading of first-quarter GDP, current account, producer prices, and Eco Watchers Survey. Investors in Australia will turn their attention to NAB business confidence, Westpac consumer confidence, Ai Group Services Index, and the final estimate of building permits.

Other highlights include: India industrial production; South Africa first-quarter GDP figures, manufacturing and mining output; New Zealand Business NZ PMI.