Nothing but central banks!
After ECB and RBA, this week central banks in the United States, Japan, United Kingdom, and Swiss will also have monetary policy meetings and interest rate decisions. Investors and traders will mainly focus on Wednesday's FED announcement and FED chair Powell's press conference. Besides central banks' meetings, we also have many other data to watch, making this week the most crucial week in June.
1- UK GDP - Monday
Increasing energy prices can affect the overall GDP, but how? This is precisely what many investors want to see. In March, GDP was not very pleasant. However, it was somehow expected, as in previous weeks we could see the weakness in Retail Sales and PMI numbers, while UK consumer confidence also is at its lowest historical level. Simultaneously with GDP, we also have to watch the Industrial and Manufacturing productions. Overall data is expected chiefly not to be okay and put the pressure on UK stock markets and the Pound.
2- US Retail Sales - Wednesday
Retail Sales in the past month had an exciting story in the US. With a 0.9% increase in April, it could print the fourth month in a row of increases, and it is expected to see the fifth increase in May as well. However, it is a nominal increase. Since Retail sales are reported in nominal terms, it is also essential to see their ratio to inflation. Considering the inflation above 8% in past months, we should not be much happy about these upsurges. Since the market will focus on the FED meeting, we expect no meaningful reaction to these numbers.
3- FOMC meeting - Wednesday
US Federal Reserve Open Market Committee will hold its monetary policy meeting and interest rate decision this week on Tuesday and Wednesday, with its final announcement on Wednesday. Since the market is already aware of the 50 bps rate hike, now mostly focuses will be on other things. We must focus on dot plots, FED Economic Outlook, and comments about September rate hike. Since economists doubt on inflation peak, the FED is expected to back off from its earlier comments of pausing the rate hikes in September! Let us not predict and wait for the meeting!
4- Swiss National Bank - Thursday
SNB and BoJ are the only central banks among developed economies that still have maintained their negative interest rates. For this meeting, it is expected that the Swiss National bank will hold its -0.75% rates. However, with the deteriorating situation in Ukraine, the announcement must include some hawkish tones, which can lift the Franc against its crosses.
5- Bank of England - Thursday
The second central bank that will hold the meeting on Thursday is located in London. The United Kingdom, in general, does not have a suitable condition now. Despite surviving in the confidence vote, PM Johnson has a slippery position while inflation is increasing and GDP surprisingly was down in the previous month with lowering the retail sales. Despite all, for this week, we still expect that BOE remains on course for further rate hikes, which would increase the pressures on UK stock markets.
6- Bank of Japan - Friday
In the past week, we had an expected comment from BoJ's governor Mr. Kuroda. He said the Japanese economy still needs support, and BoJ can continue its accommodative policy. Even though he was not happy with the Yen value against its crosses, it does not appear to be a central bank's priority in Japan. For this week, we are still expecting a very accommodative policy stance with holding the rates unchanged, which will hold the pressure on the Japanese Yen!
Your storytelling skills are excellent. You had me hooked from the first sentence until the end!