GLOBAL MORNING BRIEFING: Eyes on Norges Bank, CBRT & Banxico

Thursday sees three central bank meetings (Norway, Turkey and Mexico) as well as flash PMIs. In the early morning both UK PSNF and French manufacturing sentiment are due.

UK Public Sector Finances (0700 BST)

Public sector net borrowing is seen at 11.5b (down from 17.8b) and around 12.0b (down from 18.6b) net of banking groups. This May’s borrowing is set to be substantially lower than the 17.9b (ex banks) borrowed in May 2021, as pandemic-related costs such as the test-and-trace scheme have come to an end.

France Manufacturing Sentiment (0745 BST)

A modest one-point reduction is anticipated for both French business and manufacturing sentiment indicators, bringing both indexes to 105 and a fresh 15-month low. Growth outlooks and foreign order books are likely to again squeeze expectations, whilst selling prices are seen soaring further.

Flash June PMIs

S&P Global’s flash PMI June round has manufacturing and services PMIs weakening by around 0.5-0.9 points across the board as inflationary pressures are likely to see slowdowns in new orders and demand.

Slumps in manufacturing are expected to marginally outpace those in services, as the added pressure of continued Chinese lockdowns, supply disruptions and volatile commodity prices continue to prove difficult for the industry.

A notable 0.1pp uptick is expected for US services. As such, markets will be watching to see if Summer demand is able to remain robust despite disposable incomes feeling the squeeze.

Norges Bank Rate Decision (0900 BST)

Tighter policy has been well signposted for the Norwegian Central Bank meeting today. Markets have fully priced a 25bps rate rise to 1.00% - and partially a 50bps rise.

While inflation, rates among trade partners and firm oil prices argue in favour of a more sizeable 50bps hike this month, the board are likely to stick to their predictable, steady, “gradual” 25bps due to a unique transmission mechanism and a firm preference for credibility-driven policy.

For our in-depth preview click here.

CBRT Rate Decision (1200 BST)

The CBRT are firmly expected to keep policy rates unchanged for the sixth consecutive month at 14.00%.

The CBRT remains highly politically influenced and willing to look through soaring cost pressures and inflation expectations. Rate hikes remain an unlikely tail risk, with Erdogan this month reiterating his firm opposition to tighter headline rates. As such, most analysts expect rates at 14.00% into year-end. See our preview here.

Banxico Rate Decision (1900 BST)

Banxico are expected to raise rates by 75bps from 7.00 to 7.75% at the June meeting. Continued pressure on core inflation alone may well have justified the more aggressive action, however, a more hawkish Federal Reserve has all but cemented the prospect of Banxico increasing their pace of tightening. Beyond the rate decision, market participants will be particularly attentive to the vote split and whether the statement provides any signalling for future decisions.

Click here for our comprehensive preview.

Date	GMT/Local	Impact	Flag	Country	Event
23/06/2022	0600/0700	***		UK	Public Sector Finances
23/06/2022	0600/0800	**		SE	PPI
23/06/2022	0645/0845	**		FR	Manufacturing Sentiment
23/06/2022	0715/0915			FR	Flash Manufacturing, Services PMI
23/06/2022	0715/0915	**		FR	IHS Markit Services PMI (p)
23/06/2022	0715/0915	**		FR	IHS Markit Manufacturing PMI (p)
23/06/2022	0730/0930	**		DE	IHS Markit Services PMI (p)
23/06/2022	0730/0930	**		DE	IHS Markit Manufacturing PMI (p)
23/06/2022	0800/1000	***		NO	Norges Bank Rate Decision
23/06/2022	0800/1000			EU	ECB Economic Bulletin
23/06/2022	0800/1000			EU	Flash Manufacturing, Services PMI
23/06/2022	0800/1000	**		EU	IHS Markit Services PMI (p)
23/06/2022	0800/1000	**		EU	IHS Markit Manufacturing PMI (p)
23/06/2022	0800/1000	**		EU	IHS Markit Composite PMI (p)
23/06/2022	0830/0930	***		UK	IHS Markit Manufacturing PMI (flash)
23/06/2022	0830/0930	***		UK	IHS Markit Services PMI (flash)
23/06/2022	0830/0930	***		UK	IHS Markit Composite PMI (flash)
23/06/2022	1000/1100	**		UK	CBI Distributive Trades
23/06/2022	1100/0700	*		TR	Turkey Benchmark Rate
23/06/2022	-			EU	ECB Lagarde at European Council Meeting
23/06/2022	1230/0830	**		US	Jobless Claims
23/06/2022	1230/0830	*		US	Current Account Balance
23/06/2022	1345/0945	***		US	IHS Markit Manufacturing Index (flash)
23/06/2022	1345/0945	***		US	IHS Markit Services Index (flash)
23/06/2022	1400/1000			US	Fed Chair Jerome Powell
23/06/2022	1430/1030	**		US	Natural Gas Stocks
23/06/2022	1500/1100	**		US	DOE weekly crude oil stocks
23/06/2022	1530/1130	*		US	US Bill 08 Week Treasury Auction Result
23/06/2022	1530/1130	**		US	US Bill 04 Week Treasury Auction Result
23/06/2022	1700/1300	**		US	US Treasury Auction Result for TIPS 5 Year Note
23/06/2022	1800/1400	***		MX	Mexico Interest Rate