A Week in the Market: Central Banks and Inflation (6–10 June)
This new week will bring along a flow of statistics from all over the world, while the CBs of the Euro zone and Australia will decide upon the interest rate. We are sure that this news could be useful.
The Reserve bank of Australia will gather for a meeting. The consensus forecast demonstrates that the CB may raise the interest rate by 20–35 base points. Presently, the rate is 0.35%.
The Australian regulator has already given signals of being ready to lift the rate: the mystery is only the scale of the change. A neutral decision will let the AUD go on with the planned growth.
The European Central bank is likely to leave the rate at zero because it thinks that the time for deisive ations has not come yet. Most probably, the rate will be raised in July, and for now the regulator will treat us on signals. Reactions of the EUR will depend on what the ECB will say but there will not be many reasons for growth.
Out of the new block of statistics that Japan plans to issue we care for the GDP for Q1, which will be the final estimation. The economy could have dropped by 0.3% q/q instead of the known -0.2% q/q.
Household spending in April will also be curious to see: it might have dropped by 0.5% y/y upon falling by 2.3% in April. The growth of household spending means the population has begun to spend more, which is a foothold for future GDP. The JPY might grow.
The US will present some limited statistics. Investors are likely to check out the information about the CPI in May. Inflation is supposed to have grown by 0.7% m/mspeeding up almost twice against April. The speeding-up of inflation will mean that the Fed is to take action and might provoke some movements in the USD.
China will publish its trade balance for May: some growth is expected. Moreover, the world will see inflation and the PPI for the previous month. Inflation might have sped up a bit to 2.2% y/y, while tension inside the PPI could have shrunk noticeably. Stabilisation of the Chinese macro statistics can have a good influence on risky assets.