MNI GLOBAL WEEK AHEAD: Eyes on Fed & ECB Rate Decisions

MONDAY

No data of note.

TUESDAY

UK Labour Report: The April/May report should confirm that the UK labour market remains robust, albeit showing initial signs of cooling. The April unemployment rate is seen ticking up by 0.1pp to 4.0%, whilst the employment change 3m/3m slows around 25k from +182k in March. May earnings data will likely hint at a resurgence in upwards pressure on wages, with consensus looking for a 0.3pp uptick in weekly earnings to +6.1% 3m/yoy. This would underscore the risk highlighted by the BOE's May MPR comment "there continued to be a risk that pay growth could plateau at rates above those consistent with meeting the 2% inflation target sustainably in the medium term".

Germany Final HICP / ZEW Survey: The final data for May should confirm that German HICP contracted by -0.2% m/m, cooling by 1.3pp to +6.3% y/y. The non-harmonised data saw a 4.2pp deceleration in energy prices to +2.6% y/y in May alongside a 2.3pp slowdown in food inflation to +14.9% y/y, accounting for the bulk of lower May inflation.

PMI data suggests a solid deceleration in industrial goods, whilst services inflation also eased in May, down 0.2pp at +4.5% y/y. Destatis linked this deceleration as likely due to the introduction of the "Germany Ticket" for transport. These data alongside some regional data points towards a decent reduction in core CPI for Germany due alongside the final May data.

The German ZEW survey for June is projected to record a fourth consecutive decline (anticipated down 5.2 points at -42), with the expectations index again leasing the plunge, implying German financial market experts expect a worsening of economic conditions over the next six months.

US CPI: CPI is estimated to ease by 0.2pp to +0.2% m/m in May, with core holding steady at +0.4% m/m. Consensus is looking for annualised CPI to cool by 0.8pp to +4.1% y/y. Barring a marked upside surprise, the May data is not expected to shift the FOMC from pausing this week. April core details were mixed as the main upside driver came from an even larger than flagged increase in used cars (accounting for a hefty 0.17pps of the change in M/M rates) with the surprise mostly offset by softer volatile items.

WEDNESDAY

UK Monthly GDP: The UK economy is expected to advance +0.2% m/m in April, in a soft rebound from the -0.3% m/m March contraction, whereby wet weather likely dampened spending appetite. A recovery in April services sector activity will likely drive the rebound. The May BOE latest growth forecasts saw a marked upgrade and a recession no longer in sight. Lower energy prices, fiscal stimulus and recovering confidence underscored a less-weak outlook, however in aggregate the growth picture looks relatively stagnant.

Eurozone Industrial Production: After last week’s weak Italy print (-1.9% m/m), muted German growth (up +0.3% m/m, compared to expectations of a +0.6% rise) and stronger than expected figures in France (up +0.8% m/m), a +0.9% m/m and +0.7% y/y expansion is pencilled in for the eurozone aggregate print. The giant +21.4% m/m jump in volatile Irish data will have partly accounted for the stronger April data, masking more stagnant outlooks.

Fed Rate Decision: Notwithstanding an extraordinary surprise in the May CPI reading due June 13th, the FOMC’s tightening cycle is likely to “skip” June’s meeting, with the Committee holding rates at 5.00-5.25% while signalling that it currently expects to hike at the following meeting in July.

While data and events since early May have on balance probably justified another 25bp hike, some data have left room for doubt, and the FOMC has set a fairly high bar to further tightening.

See the MNI preview here for full analysis.

THURSDAY

France Final HICP: French final inflation should confirm the downside surprise in the May flash, which saw HICP fall -0.1% m/m (vs +0.3% expected), cooling by 0.9pp to +6.0% y/y (vs +6.4% expected). The deceleration in French manufactured goods by 0.5pp to +4.1% y/y and in services by 0.2pp to +3.0% y/y implies a decline in French core CPI is likely.

ECB Rate Decision: This week’s decision should be straightforward, containing not just a hike to 3.5% but also confirmation of an end to reinvestments under the ECB’s Asset Purchase Programme. The statement is likely to repeat that rates should remain at restrictive levels for however long is necessary, while retaining the commitment to data-dependent meeting-by-meeting decisions, and would certainly avoid any phrasing which might be interpreted as pointing to cuts any time soon.

US Retail Sales / Industrial Production: US advance retail sales data for May is seen dipping into contraction at -0.1% m/m, from +0.4% m/m in April. Lower auto sales and gas prices will likely underpin this. IP data for the month is expected to be close to stalling at +0.1% m/m, decelerating from +0.5% m/m in April, which was stronger than expected but completely offset by prior downward revisions.

FRIDAY

Italy Final HICP: Final prints for May Italian HICP should confirm the softer +0.3% m/m rise (easing from +1.0% in April), and 0.6pp deceleration to +8.1% y/y (easing from +8.7% April). Cooling energy prices accounted for the bulk of the May deceleration, followed by softer slowdowns in industrial goods.

Eurozone Final HICP: Eurozone headline CPI final data will likely confirm HICP eased to +6.1% y/y in May, from +7.0% y/y in April and lower than the consensus forecast of +6.3% (although market expectations were probably a little lower than this given some of the soft national prints released over the past couple of days). May headline CPI was 0.0% month-on-month. Core CPI meanwhile eased to +5.3% y/y, from +5.6% y/y in April in a positive development for sticky-core concerned ECB.

Source: St. Louis Fed FRED, Board of Governors of the Federal Reserve System (US)

Date	GMT/Local	Impact	Flag	Country	Event
12/06/2023	-	***		CN	Money Supply
12/06/2023	-	***		CN	New Loans
12/06/2023	-	***		CN	Social Financing
12/06/2023	1400/1500			UK	BOE Mann at Signum Chairman Charles Myers Webinar
12/06/2023	1500/1100	**		US	NY Fed survey of consumer expectations
12/06/2023	1530/1130	***		US	US Note 03 Year Treasury Auction Result
12/06/2023	1530/1130	*		US	US Treasury Auction Result for 26 Week Bill
12/06/2023	1700/1300	*		US	US Treasury Auction Result for 13 Week Bill
12/06/2023	1700/1300	**		US	US Note 10 Year Treasury Auction Result
13/06/2023	0600/0700	***		UK	Labour Market Survey
13/06/2023	0600/0800	***		DE	HICP (f)
13/06/2023	0600/0800	**		NO	Norway GDP
13/06/2023	0700/0900	***		ES	HICP (f)
13/06/2023	0900/1100	***		DE	ZEW Current Conditions Index
13/06/2023	0900/1100	***		DE	ZEW Current Expectations Index
13/06/2023	0900/1000	**		UK	Gilt Outright Auction Result
13/06/2023	1000/0600	**		US	NFIB Small Business Optimism Index
13/06/2023	1230/0830	***		US	CPI
13/06/2023	1255/0855	**		US	Redbook Retail Sales Index
13/06/2023	1400/1500			UK	BOE Bailey Lords Economic Affairs Committee Hearing
13/06/2023	1400/1000			US	Treasury Secretary Janet Yellen
13/06/2023	1500/1600			UK	BOE Dhingra Speech at Manchester Metropolitan University
13/06/2023	1530/1130	*		US	US Treasury Auction Result for Cash Management Bill
13/06/2023	1530/1130	**		US	US Treasury Auction Result for 52 Week Bill
13/06/2023	1700/1300	***		US	US Treasury Auction Result for 30 Year Bond
14/06/2023	0600/0700	**		UK	UK Monthly GDP
14/06/2023	0600/0700	***		UK	Index of Production
14/06/2023	0600/0700	**		UK	Index of Services
14/06/2023	0600/0700	**		UK	Trade Balance
14/06/2023	0600/0700	**		UK	Output in the Construction Industry
14/06/2023	0600/0800	***		SE	Inflation Report
14/06/2023	0900/1100	**		EU	Industrial Production
14/06/2023	1100/0700	**		US	MBA Weekly Applications Index
14/06/2023	1230/0830	*		CA	Household debt-to-income
14/06/2023	1230/0830	***		US	PPI
14/06/2023	1430/1030	**		US	DOE Weekly Crude Oil Stocks
14/06/2023	1800/1400	***		US	FOMC Statement
15/06/2023	2245/1045	***		NZ	GDP
15/06/2023	2350/0850	**		JP	Trade
15/06/2023	0130/1130	***		AU	Labor Force Survey
15/06/2023	0200/1000	***		CN	Fixed-Asset Investment
15/06/2023	0200/1000	***		CN	Retail Sales
15/06/2023	0200/1000	***		CN	Industrial Output
15/06/2023	0200/1000	**		CN	Surveyed Unemployment Rate
15/06/2023	0645/0845	***		FR	HICP (f)
15/06/2023	0900/1100	*		EU	Trade Balance
15/06/2023	-			EU	ECB Panetta at Eurogroup Meeting
15/06/2023	1215/0815	**		CA	CMHC Housing Starts
15/06/2023	1215/1415	***		EU	ECB Deposit Rate
15/06/2023	1215/1415	***		EU	ECB Main Refi Rate
15/06/2023	1215/1415	***		EU	ECB Marginal Lending Rate
15/06/2023	1230/0830	**		US	Jobless Claims
15/06/2023	1230/0830	**		US	WASDE Weekly Import/Export
15/06/2023	1230/0830	**		CA	Monthly Survey of Manufacturing
15/06/2023	1230/0830	***		US	Retail Sales
15/06/2023	1230/0830	**		US	Import/Export Price Index
15/06/2023	1230/0830	**		US	Empire State Manufacturing Survey
15/06/2023	1230/0830	**		US	Philadelphia Fed Manufacturing Index
15/06/2023	1245/1445			EU	Post-Meeting ECB Press Conference
15/06/2023	1300/0900	*		CA	CREA Existing Home Sales
15/06/2023	1315/0915	***		US	Industrial Production
15/06/2023	1400/1000	*		US	Business Inventories
15/06/2023	1430/1030	**		US	Natural Gas Stocks
15/06/2023	1535/1635			UK	BOE Cunliffe at Politico Global Tech Summit
15/06/2023	2000/1600	**		US	TICS
16/06/2023	0200/1100	***		JP	BOJ policy announcement
16/06/2023	0700/0300			US	St. Louis Fed's James Bullard
16/06/2023	0800/1000	**		IT	Italy Final HICP
16/06/2023	0830/0930	**		UK	Bank of England/Ipsos Inflation Attitudes Survey
16/06/2023	0900/1100	***		EU	HICP (f)
16/06/2023	1145/0745			US	Fed Governor Christopher Waller
16/06/2023	-			EU	ECB de Guindos at ECOFIN Meeting
16/06/2023	1230/0830	**		CA	Wholesale Trade
16/06/2023	1230/0830	*		CA	International Canadian Transaction in Securities