Weekly Market Forecast (June 24-28)

Upcoming events:

• MondaySummary of the views of the Bank of Japan and the German IFO.
• Tuesday: Canadian Consumer Price Index, US Consumer Confidence.
• Wednesday: Australia’s monthly consumer price index.
• Thursday: Japanese Retail Sales, US Durable Goods Orders, US Final Q1 GDP, US Unemployment Claims.
• Friday: Tokyo CPI, UK Final Q1 GDP, Canada GDP, US Personal Consumption Expenditures, University of Michigan Consumer Confidence (final).

Tuesday

Canadian CPI YoY is expected to come in at 2.6% vs. 2.7% previously, while M/M is expected at 0.3% vs. 0.5% previously. The average CPI on an annual basis is expected to be 2.8% versus 2.9% previously, while the average Consumer Price Index (CPI) on an annual basis is expected to be 2.6% versus 2.6% previously.

the final report show up Core inflation measures fell within the Bank of Canada’s 1-3% target range. Which gave the central bank the green light to deliver Top notch pieces. The market sees a 67% chance of interest rates being cut again in July but that will depend on this week’s CPI data.

The US Consumer Confidence Index is expected to come in at 100, compared to 102 previously. the final report Confidence showed improvement after three consecutive months of decline. The Conference Board’s senior economists stressed that ” Strong job market Continued to enhance consumers’ comprehensive assessment of the current situation.

Moreover, “looking ahead, fewer consumers expected a deterioration in future working conditions, job availability, and income.” Overall trust measure It has remained within the relatively narrow range in which it has been hovering for more than two years. The current status indicator will be something to keep an eye on given the recent bugs in US unemployment claims Because this is generally a Leading indicator
Regarding the unemployment rate.

Wednesday

Australian monthly CPI is expected to be 3.8% year-on-year versus 3.6% previously. Reminder, final report The upward trend surprised us as core inflation measures remained steady at higher levels. The Reserve Bank of Australia maintained a hawkish stance at Last policy meeting He reiterated that “inflation is still above the target and is proving persistent,” and added that “inflation is declining, but it was slower than previously expected.”

For this reason, the central bank kept all options on the table by “not ruling anything out either at home or abroad.” Some better inflation data won’t change much for the market, but another disappointment could add some slight interest rate hike opportunities. The RBA is expected to remain on hold until mid-2025.

Thursday

US unemployment claims remain one of the most important releases to follow each week as they are a convenient indicator of the state of the labor market. Initial claims continue to hover around the cycle lows, while continuing claims remain steady around the 1800K level.

This has led to a weaker and weaker market reaction as participants become accustomed to these numbers. However, In the last two weeks we have started to see data falling short of expectations Although it remains below the cycle highs. This is something to keep an eye on.

Initial claims this week are expected to be 236,000 versus 238,000 beforeWhile continuing claims amounted to 1,820 thousand, compared to 1,828 thousand previously.

Friday

YoY core CPI in Tokyo is expected to come in at 2.0% versus 1.9% previously. Japan’s inflation rate is basically on target and there are no strong signs of a return to acceleration. It is difficult to see a rate hike given that Japan has strived to achieve inflation for decades, and could destroy that achievement by tightening policy. The data should not change anything for the Bank of Japan, which is expected to reduce its bond purchases by a “significant” amount at the next policy meeting.

The headline US PCE index is expected to come in at 2.6% y/y vs. 2.7% previously, while the month/month index is expected at 0.0% vs. 0.3% previously. The core PCE index is expected to come in at 2.6% y/y vs. 2.8% previously, while the monthly reading is expected at 0.1% vs. 0.2% previously. Forecasters can reliably estimate PCE as soon as the CPI and PPI are released, so the market already knows what to expect. This report won’t change anything for the Fed The central bank remains in a “wait and see” mode until at least September.