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MNI GLOBAL WEEK AHEAD: RBA & BOC Rates Decisions Coming Up

MNI (London)
Both RBA and BOC interest rate decisions are the focus for the week ahead.

MONDAY

Switzerland CPI: Swiss inflation is expected to continue to cool in the May data, with consensus looking for a 0.3pp deceleration to +2.3% y/y, the lowest since Feb 2022. Slowing food, energy and transport inflation have underpinned recent declines in the headline rate. Prices are projected to re-accelerate on the month by +0.3% after having stalled in April. The core CPI rate is seen edging down 0.2pp to +2.0% y/y. The June 22 meeting baseline currently looks for a further 25bps hike. Markets are pricing a SNB peak rate of between 1.75% and 2.00%.

Eurozone PPI: Eurozone Producer Prices are set to cool further in April, with consensus pencilling in a substantial -2.2% m/m and a 4pp slowdown to +1.9 % y/y, which would be the softest in over two years. A sharp deceleration in energy prices alongside lower commodity and input costs as supply chain pressures ease have underpinned the marked decline in factory-gate inflation. The continuation of slowing PPI has been foreshadowed by softening prices recent PMI data.

Final Services PMIs: The final services PMI prints for May should confirm a firm expansion of the sector in Europe and the US, whilst flagging services inflation concerns as costs and demand conditions remain strong.

US Factory Orders and ISM Services PMI: A 0.8% m/m uptick in US factory orders is pencilled in for April, after aircraft orders provided a March boost. The ISM services PMI is seen up 0.6-points at 52.5, signalling continued strength in the industry as demand remains robust. Of interest will be whether services inflation is again flagged as higher, and more concrete evidence of wariness regarding H2 growth outlooks.

TUESDAY

RBA Rate Decision: The likelihood of another 25bp bump to the Reserve Bank of Australia's official cash rate to 4.1% has risen following a sharp jump in the country's minimum- and award-wage system and a persistently high monthly inflation print in April. See here for more.

Germany Factory Orders: A +3.5% m/m rebound is expected for April factory orders for the largest eurozone member, following the sharp 10.7% m/m decline which reflected weak auto and the recalibration from February army vehicle orders. German unfilled manufacturing orders still remain elevated according to Destatis at 7.4 months of work in March, compared to March 2020 levels of 5.9 months.

Eurozone Retail Trade: After a contractionary end to Q1, April euro area retail sales are projected to be marginally positive at +0.2% m/m, remaining -3.0% below April 2022 levels. The EC's Eurozone consumer confidence improved further in April, alongside the major purchase intentions index, implying outlooks are slowly brightening yet remain subdued.

WEDNESDAY

Germany Industrial Production: Following the robust French April print, German industrial production is expected to follow suit with a +1.0% m/m and +1.4% y/y uptick. Headwinds to demand have been flagged by the contractionary PMI over recent months, alongside muted IFO expectations imply lacklustre production buffered by previous orders for now.

BOC Rate Decision: The Bloomberg consensus predicts the Bank of Canada will again hold rates steady at 4.5% at the June meet. Yet concerns that the current pause was premature have mounted as CPI remains elevated and the upside surprise to Q1 GDP showed underlying excess demand remained robust. Markets are pricing around a one-third chance of a 25bp hike.

THURSDAY

Eurozone GDP Final Estimate: After a surprise downward revision saw German final Q1 GDP at -0.3% q/q, from 0.0% estimated in the flash, the eurozone final Q1 estimate is expected to be flat rather than +0.1% q/q. It remains unlikely that eurozone contracted in Q1, however a negative reading means the bloc will have entered an (albeit very shallow) technical recession.

FRIDAY

Italy Industrial Production: A more muted +0.2% m/m uptick is anticipated for Italian IP in April, improving from the -0.6% m/m March contraction.


DateGMT/LocalImpactFlagCountryEvent
05/06/20232300/0900*AU IHS Markit Final Australia Services PMI
05/06/20230030/0930**JP IHS Markit Final Japan Services PMI
05/06/20230130/1130AU Business Indicators
05/06/20230145/0945**CN IHS Markit Final China Services PMI
05/06/20230600/0800**DE Trade Balance
05/06/20230630/0830***CH CPI
05/06/20230715/0915**ES S&P Global Services PMI (f)
05/06/20230745/0945**IT S&P Global Services PMI (f)
05/06/20230750/0950**FR IHS Markit Services PMI (f)
05/06/20230755/0955**DE IHS Markit Services PMI (f)
05/06/20230800/1000**EU IHS Markit Services PMI (f)
05/06/20230830/0930**UK S&P Global Services PMI (Final)
05/06/20230900/1100**EU PPI
05/06/20231300/1500EU ECB Lagarde Intro at ECON Hearing
05/06/20231345/0945***US IHS Markit Services Index (final)
05/06/20231400/1000***US ISM Non-Manufacturing Index
05/06/20231400/1000**US Factory New Orders
06/06/20232301/0001*UK BRC-KPMG Shop Sales Monitor
06/06/20230430/1430***AU RBA Rate Decision
06/06/20230600/0800**DE Manufacturing Orders
06/06/20230700/0900**ES Industrial Production
06/06/20230730/0930**EU IHS Markit Final Eurozone Construction PMI
06/06/20230830/0930**UK IHS Markit/CIPS Construction PMI
06/06/20230900/1100**EU Retail Sales
06/06/20230900/1000**UK Gilt Outright Auction Result
06/06/20231230/0830*CA Building Permits
06/06/20231255/0855**US Redbook Retail Sales Index
06/06/20231400/1000*CA Ivey PMI
06/06/20231400/1000**US IBD/TIPP Optimism Index
07/06/20230130/1130***AU Quarterly GDP
07/06/20230545/0745**CH Unemployment
07/06/20230600/0800**DE Industrial Production
07/06/20230645/0845*FR Foreign Trade
07/06/20230750/0950EUECB de Guindos Speech at EC/ECB Conference
07/06/20230800/1000*IT Retail Sales
07/06/20230900/1000**UK Gilt Outright Auction Result
07/06/20230910/1110EUECB Panetta Moderates EC/ECB Conference Panel
07/06/20231100/0700**US MBA Weekly Applications Index
07/06/20231230/0830**CA International Merchandise Trade (Trade Balance)
07/06/20231230/0830**US Trade Balance
07/06/20231400/1000***CA Bank of Canada Policy Decision
07/06/20231430/1030**US DOE Weekly Crude Oil Stocks
07/06/20231900/1500*US Consumer Credit
08/06/20232350/0850**JP GDP (r)
08/06/20230130/1130**AU Trade Balance
08/06/20230900/1100***EU GDP (final)
08/06/20230900/1100*EU Employment
08/06/20231230/0830**US Jobless Claims
08/06/20231230/0830**US WASDE Weekly Import/Export
08/06/20231400/1000**US Wholesale Trade
08/06/20231430/1030**US Natural Gas Stocks
08/06/20231920/1520CA BOC Deputy Beadury speech
09/06/20230600/0800*NO CPI Norway
09/06/20230600/0800**SE Private Sector Production
09/06/20230800/1000*IT Industrial Production
09/06/20230800/1000EU ECB de Guindos in Capital Requirements Seminar at EU Parliament
09/06/20231230/0830***CA Labour Force Survey
09/06/20231400/1000*US Services Revenues
09/06/20231600/1200***US USDA Crop Estimates - WASDE
09/06/20231800/1400**US Treasury Budget

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