US: All eyes on the Fed this week
Though it is pretty unlikely that the Federal Reserve will actually slash interest rates this time out, it could be the summer meeting that provokes the most market movement if the central bank signals that it will do so in July.
The level of uncertainty around the Fed’s actions – uncertainty greatly exacerbated every time Trump opens his mouth – means cable could be in for quite the week.
Complicating matters is the ongoing trade war between the US and China, a factor that is now arguably as, if not more, important than inflation in regards to what the Federal Reserve will end up doing in the next few months.
Every day seems to throw up a seemingly contradictory set of statements from Trump, and with the G20 meeting in Osaka – the site of a potential tête-à-tête between the President and China’s Xi Jinping – not until the end of the month, there is plenty of opportunity for more mind games.
Beyond all that, there are the building permits and housing starts figures on Tuesday, the Philly Fed manufacturing index on Thursday, and the flash manufacturing and services PMIs on Friday.
UK: The Bank of England interest rate vote
As the Tory leadership battle rumbles on – including a televised debate on the BBC on Tuesday, following the second ballot on the same day – the UK faces a data gauntlet in the second half of the week.
Wednesday sees the latest inflation reading, which came in at 2.1% last month, before moving onto the ever-volatile retail sales figures on Wednesday, and the public sector net borrowing numbers on Friday.
Also on Thursday comes the June Bank of England interest rate vote, an event unlikely to bring any surprises given that the MPC’s hands are currently tied by the UK’s Brexit limbo.
As for the economic calendar, it’s not the most exciting week. Berkeley Group and Whitbread report on Wednesday, and Dixons Carphone on Thursday.
Eurozone: Manufacturing and services data
While the Eurozone has the ZEW economic sentiment and inflation data on Tuesday, the real good stuff doesn’t arrive until Friday, when the flash manufacturing and services PMIs are revealed on Friday. They could dictate how the region ends the week, considering their recent softness.
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