Week Ahead – June 19th

In the United States, the spotlight will be on speeches by several Fed officials, including Chair Jerome Powell’s testimony before Congress. Investors will also closely follow flash PMI services and manufacturing readings, as well as housing data such as housing starts, building permits, and existing home sales. It will be a busy week in the United Kingdom, with the Bank of England’s interest rate decision, as well as releases for the inflation rate, retail sales, and consumer confidence. Additionally, central banks in China, Switzerland, Norway, Turkey, Brazil, the Philippines, Indonesia, and Hungary will provide details on the course of their monetary policy. Elsewhere, inflation rates will be released for Japan, South Africa, and Malaysia. Finally, flash PMIs for June will offer a first look into economic conditions in Australia, Japan, the UK, the Euro Area, Germany, and France.

Next week, the economic calendar is relatively light in the US, but investors will be closely monitoring key speeches by several Federal Reserve policymakers to gauge the potential trajectory of monetary policy in the coming months. Additionally, Federal Reserve Chair Jerome Powell and his colleagues Lisa Cook and Philip N. Jefferson will testify before Congress. The US markets will be closed on June 19 in observance of the Juneteenth holiday. Turning to economic data, the housing sector is expected to show a modest increase in both building permits and housing starts for the month of May. Also, investors will follow June’s flash S&P Global PMI figures that is expected to show that growth in both services and manufacturing sector decelerated. Other indicators to follow include: homebuilder sentiment, existing home sales, Q1 current account, and the Chicago Fed National Activity Index. In Brazil, the central bank is set to keep the key Selic rate at 13.75%, the highest level since the end of 2016, in an efforts to keep inflation at bay. In Canada, the main data covers retail sales and house prices.

In the United Kingdom, the Bank of England is anticipated to raise the bank rate by another 25 bps to 4.75%, marking the 13th consecutive hike and pushing borrowing costs to the highest level since October 2008. This move comes as annual consumer price inflation in the UK is estimated to have fallen to 8.5% in May, the lowest level since March 2022 but still well above the Bank of England’s target of 2%. Also, several central lenders in Europe, such as the Swiss National Bank, the Norges Bank, and the Central Bank of Turkey, will be deciding on monetary policy. On the economic data calendar, flash PMI for June is set to point to a further growth slowdown in the services sector and a sharper decline in manufacturing production across the Euro Area and the United Kingdom. Additionally, early estimates suggest that consumer confidence in the Euro Area improved slightly for the third consecutive month in June. Other releases to follow: Germany’s producer prices, UK’s Gfk consumer confidence, CBI gauges of industrial trends orders and distributive trades and public sector net borrowing; France’s business morale; Switzerland’s foreign trade; and Turkey’s consumer and business survey.

In Asia, the People’s Bank of China is seen slashing its 1-year and 5-year loan rates by 10bps, aligning with recent cuts for shorter-term rates, to support the country’s economic recovery. Interest rate decisions are also due from monetary authorities in Indonesia and the Philippines. In Japan, a busy week will be headlined by the inflation print for May, followed by minutes from the Bank of Japan’s latest rate-setting meeting and fresh PMI data from June. Elsewhere, Malaysia will divulge its CPI for May.

In Australia, all eyes will be on minutes from the RBA’s latest minutes for insights on the unexpected rate hike and the policy stance. Investors also keenly await June PMI data. Meanwhile, New Zealand will unveil trade figures.