Week Ahead – June 26th

In the US, the spotlight will be on the Bank Stress Test results and data, including personal income and spending, as well as the PCE price indexes. Additionally, it will be interesting to follow durable goods orders, the final reading of GDP growth, Michigan Consumer Confidence, and new and pending home sales. Moreover, several central bank officials, including Fed Chair Powell and ECB President Lagarde, will attend the ECB Forum on Central Banking in Portugal. Elsewhere, investors will be closely monitoring inflation rate releases for Canada, the Euro Area, Germany, Italy, France, and Spain. Finally, in China, the NBS Manufacturing and non-manufacturing PMIs will be released, while in Germany, the Ifo Business Climate Index and GFK Consumer Confidence will be of importance.

In the United States, the personal income and outlays report is expected to show consumer spending growth slowed down to 0.2%, while income grew at a steady 0.4%. Meanwhile, the PCE price index, which serves as the Federal Reserve’s preferred inflation measure, is likely to show the price pressures eased slightly in May. Additionally, durable goods orders are anticipated to decline for the first time in 3 months in May. Several other key data points warrant attention, including new and pending home sales, S&P/Case-Shiller home prices, Chicago PMI, Dallas Fed Manufacturing Index, advance estimates of the goods trade balance and wholesale inventories, and the final readings of first-quarter GDP and June’s Michigan consumer sentiment. Investors will also closely monitor the release of the Federal Reserve’s stress test results on Wednesday to gauge banks’ resilience. In other parts of the Americas, investor focus will shift to Canada’s monthly GDP figures and inflation rate, as well as Mexico’s foreign trade and jobless rate, and Brazil’s unemployment data.

In Europe, the focus will be on preliminary inflation rates for the Eurozone, Germany, France, Italy, and Spain. It is expected that the consumer price inflation rate in the 19-nation currency bloc will continue to ease, reaching 5.6% in June, the lowest level since January 2022. However, the annual core inflation rate is projected to rebound, accelerating to 5.5% from 5.3% in May. In Germany, attention will be on the Ifo Business Climate indicator, which is anticipated to decline to a five-month low. On the other hand, the GfK Consumer Climate Indicator is set to increase for the eighth consecutive month, reaching its highest level since April 2022. Additional data releases include the Euro Area’s business survey and unemployment rate, Germany’s retail sales and jobless rate, as well as Switzerland’s retail trade and KOF leading indicators. In the UK, the final estimate of the first-quarter GDP will be published, accompanied by monetary indicators, the current account, Nationwide housing prices, and the CBI distributive trades data. Finally, the ECB Forum on Central Banking, scheduled from June 26 to 28 in Portugal will feature prominent central bank governors, including ECB President Lagarde and Fed Chair Powell, engaging in discussions about the crucial topic of macroeconomic stabilization in the face of a volatile inflation environment.

In Asia, all eyes will be on China’s June NBS Manufacturing PMI for the latest insights on the underwhelming economic recovery since the end of pandemic lockdowns in February. Investors will also keep an eye for the country’s industrial profits for May. In Japan, a busy week of economic releases will be headlined by consumer confidence for June, following May’s unemployment rate, industrial production, retail sales, and the BoJ’s Summary of Opinion. Meanwhile, India will release its first-quarter current account, while South Korea will unveil June consumer and business confidence barometers.

In Australia, the monthly CPI indicator is set to show another deceleration in the inflation rate, while retail sales are set to tick higher. In New Zealand, markets await June’s ANZ Business Confidence index.