On Monday 19th: The US NAHB Housing Market Index is due to be published.
On Tuesday 20th: The Reserve Bank of Australia will publish its monetary policy minutes and the US Building Permit numbers are published.
On Wednesday 21st: UK inflation data and New House Prices in Canada are released.
On Thursday 22nd: The BoE is due to meet on monetary policy, Consumer Confidence in the EU is due, while Federal Reserve Chair Jerome Powell testifies before the U.S. The Senate Banking Committee, and US Existing Home Sales, GfK Consumer Confidence index, and Japanese Inflation figures are all due.
On Friday 23rd: UK Retail Sales are due, along with Flash Manufacturing and Services PMI’s for Japan, France, Germany, the EU, the UK and the US.
Weekly outlook
Following a relatively quiet start to the week, the latest UK inflation statistics and the outcome of the next Bank of England monetary policy meeting will dominate the headlines.
Bond yields in the UK this week soared beyond levels reached when Liz Truss was prime minister last year, leading traders to speculate that British authorities may not only have to boost rates this coming week but also continue the path over the summer, eventually hitting 5.7% early next year. Recent statistics also indicated that wage growth in Britain was expanding at the fastest pace in at least two decades, a particularly significant indicator of how deeply inflation is embedding itself in an economy.
Jeremy Hunt, the current UK Chancellor of the Exchequer, has suggested that the country has "no alternative" but to hike interest rates in order to stem inflation as the cost of living crisis continues.
Monday 19th of June
The NAHB/Wells Fargo Housing Market Index for the US increased by 5 points in May, reaching a reading of 50 against widespread predictions of a far lower reading. Strong demand for new builds, spurred by a restricted housing supply, has led to five straight months of increase, the highest level since July of last year. The latest figures, due at 2:00 PM GMT, are expected to remain unchanged.
Tuesday 20th of June
The Reserve Bank of Australia will publish its minutes from the most recent monetary policy meeting today at 1:30 AM GMT. The bank unexpectedly increased the cash rate by 25 basis points to 4.1% in June, following a rate increase of the same size in May, while leaving the door open for additional tightening as inflation remained persistently high and wage growth accelerated.
According to revised data, the number of building permits issued in the United States fell by 1.4% in April, to 1.417 million seasonally adjusted annual permits. This was the second month in a row that the number fell, demonstrating that consumer prices and interest rate increases had a dampening effect on housing demand. The newest preliminary data is expected to show growth to 1.435 million when it is released at 12:30 PM GMT.
Wednesday 21st of June
Due to a substantial decline in the price of energy and gas, consumer price inflation in the UK decreased to 8.7% year over year in April, the lowest level since March 2022. Even still, the inflation rate was higher than the market's forecast and remained far higher than the Bank of England's objective of 2.0%. A slight dip to 8.4% is forecast for the most recent data published at 6:00 AM GMT. Core inflation, which strips out food, energy, alcohol, and tobacco items, is also expected to dip to 5.8% from 6.8% year over year.
New house prices in Canada declined by 0.2% year-over-year in April after increasing by 0.2% in March, the first annual decrease since November 2019. New home prices have been falling since April 2022, in part because of the increased cost of borrowing money and rising inflation. Expectations for the May report are for a further 0.1% drop year over year.
Thursday 22nd of June
The Bank of England is due to meet on monetary policy this week with the decision statement due today at 11:00 AM GMT. Following market predictions, the Bank of England increased the bank rate by 25 basis points to 4.5% in May, making it the eleventh consecutive rate hike. The cost of borrowing has already reached new highs not seen since 2008, and as the central bank continues to fight stubborn inflation, expectations are for a further 25 basis point bump this week.
The Euro Area consumer confidence index flash report is due at 2:00 PM GMT. The May figures, which were confirmed at -17.4, set a new high since February 2022 and an increase from April's reading of -17.5. A further improvement to -17 is expected for this month.
Today at 2:00 PM GMT, Federal Reserve Chair Jerome Powell will testify before the U.S. Senate Banking Committee. The hearing comes a week after the Fed's monetary policy meeting when it maintained borrowing prices despite continued high inflation above the central bank’s mandate. It is the second of the Fed chair's twice-yearly presentations to Congress on the condition of U.S. monetary policy.
The seasonally adjusted annual rate of existing home sales in the US fell 3.4% to 4.28 million in April, the lowest rate in three months, below expectations of 4.3 million. The May data due at 2:00 PM GMT, is forecast for a further dip to 4.25 million.
In spite of ongoing inflation, optimism among British householders has been on the rise for four consecutive months, as measured by a rise in the GfK Consumer Confidence index which grew from -30 in April to -27 in May. A slight retraction back to -29 is forecast for June when the report is released at 11:00 PM GMT.
The newest inflation rate in Japan for May is due to be reported at 11:30 PM GMT. As food prices surged to the highest levels in decades, Japan's annual inflation rate jumped to 3.5% in April from a 6-month low of 3.2% in March. If forecasts are correct, this will hopefully recede back to 3.2%.
Friday 23rd of June
Retail sales volumes for the UK are due at 6:00 AM GMT today. Volume in April increased by 0.5% from the previous month, partially recuperating from a 1.2% decline in March and exceeding market expectations. May data is expected to show a further 0.5% growth month over month, while a year-over-year decline of 2.4% is forecast for the same month.
Flash Manufacturing and Services PMI’s are due for release across the day for a number of major economies, including Japan, France, Germany, the EU, the UK and the US. If the result of the index is more than 50.0, the sector is seen as expanding; otherwise, it is considered to be contracting.
The Flash and Final versions of this report are issued around a week apart, with the Flash release being the first and often having the most effect. Expected lackluster performance in the Manufacturing sector across the board reinforces the prospect of global recession, while the service sector continues to show some signs of positivity.
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